The twin bubbles of housing and higher education – housing bubble expanded from 1997 to 2007 and imploded. Since 2000 tuition costs have been soaring but graduate pay has been falling. What happens when you price out a generation looking for starter homes?

Dr. Housing Bubble reports:

One of the many problems facing the housing market is the lack of qualified first time home buyers. Household formation for the purposes of buying a first home typically occurs in the 25 to 34 age group. Yet this recession has hollowed out the middle class and we have found out that millions in this age category simply moved back home or don’t qualify to buy even with historically low interest rates. Typically this group would be renting and saving for their starter home. However with a poor economy for young professionals this step is being stunted. A big part of the market is being driven by lower cost distressed properties being purchased by investors. The young professional household is facing challenging times ahead especially with so many coming out with tens of thousands of dollars in student loan debt.

The higher education bubble to meet a new housing bubble?