By Quentin Fottrell
Published: Aug 28, 2014 2:45 p.m. ET
The ladder to home-ownership is a lot steeper for debt-laden graduates. They need to earn a lot more money if they want to buy a home — in some cases, over 50% more.
Recent graduates who are saddled with student debt and want to get on the property ladder will have to earn roughly one-third more annually (or $8,969 more, on average) than those who are debt-free, according to new research from real-estate website RealtyTrac.
To reach that figure, RealtyTrac took the median home price for each state and county, and calculated the minimum amount of income that would be needed to qualify for a loan to buy a house at that price. (RealtyTrac assumed a 20% down payment and a 4.13% 30-year fixed loan with a maximum debt-to-income ratio of 43%, which is the maximum ratio for a “qualified mortgage” under Consumer Financial Protection Bureau rules).