Report: Housing affordability not hampered by student loan debt

Housing affordability for recent college graduates isn't being dragged down by student loan debt, according to a new report by RealtyTrac. 

The report reveals that 96 percent of U.S housing markets are  affordable for recent graduates making a median household income, even for those that have  student loans.

Some states are better than others though when it comes to housing affordability.

In Michigan, where the median home price is $113,000, graduates with student loan debt need to make up 55 percent of their income to equal the buying power of those without college debt. Ohio, Pennsylvania and Iowa are also the most unaffordable for recent graduates with loans.

On the opposite end of the spectrum is California, where students with loans only need to make up 12 percent of their income to equal the buying power of those without student loan debt.  In California, the median home price is $375,000, but wages are typically higher than in other parts of the country.  New York, Virginia and Massachusetts are also more affordable than other states for those with loans.

In New Jersey, where the median-home price is $214,000, people also fare better than those in Michigan.

According to Darren Blomquist, vice president at RealtyTrac, recent graduates saddled with student debt that are looking to purchase a home in New Jersey only need 25 percent more than those that don't have student loan debt.  He said that's because wages are higher in New Jersey than in other parts of the country.

Regardless, 25 percent in extra income can be a challenge.

"That 25 percent additional income with student loans is going to set some people back from buying a home as quickly. You will have to make more income to equal the buying power of a home that a recent grad without any student debt would need," Blomquist said.

That 25 percent, he said, is about a $9,000 difference.

Overall, the report reveals that those with large student loan debts, need about 34 percent more income to afford a median priced home in the the U.S.

The survey looked at the affordability situation for 494 counties across the country. They found that heavy student loan debt was the difference between affording a medium priced home and not affording one in only 12 of the 494 counties measured.