[IMGCAP(1)]

IRVINE, CA—States where student-loan debt had the least-percentage impact on income needed to buy a median-priced home included California, New York, Virginia, Massachusetts and Wyoming, according to a report from RealtyTrac. The report found that, contrary to popular theory, 96% of US housing markets are still affordable for recent graduates who have student-loan debt, as long as they are earning at least the median household income.

The firm also found that student loans were the biggest hindrance to home affordability in Michigan, Ohio, Pennsylvania, Iowa and Alabama.

Using median home-price data collected from public records, along with average student-loan debt by state form the Institute for College Access & Success, the report examined the minimum amount of income needed to purchase a median-priced home with and without student loans in 494 counties, each with a population of at least 100,000 and where sufficient data was available. In 475 counties, recent graduates making the median income and having an average student-loan debt for the state could afford to buy a median-priced home. Affordable for this analysis was considered up to a maximum 43% of income spent on house payment (including taxes and insurance), assuming a 20% down payment and a 30-year loan with a 4.13% fixed interest rate.

“Contrary to much rampant speculation that student-loan debt is holding back homeownership among recent graduates, we found that the vast majority of markets are affordable for recent graduates making the median household income—even many of those recent graduates with student loans,” says Daren Blomquist, VP of RealtyTrac. “However, student loans still represent a significant handicap for recent graduates in terms of the minimum income needed to buy a median-priced home. Nationwide, recent graduates with student loans need to earn 34% more than recent graduates without student loans to be able to afford a median-priced home.”

As GlobeSt.com reported earlier this week, in the best US markets for flipping homes, properties were purchased at double-digit discounts below market value, according to a new report from RealtyTrac. The firm found that in the second quarter, on average flippers bough properties for an 8% discount below their estimated market value and resold them at an average 6% premium above their estimated market value.

[IMGCAP(2)]

[IMGCAP(3)]

[IMGCAP(4)]