Janet Yellen warns student debt may be holding back housing recovery

Appearing on Capitol Hill for the second time in two days, Federal Reserve Chairwoman Janet Yellen warned Thursday that mounting student loan debt might be holding back the housing market. Slowing housing activity, she also said, could in turn pose a threat to the continued economic recovery.

“The debt loads certainly are high enough that they may play a role in, for example, making it hard for people to buy first homes, to build a down payment,” Yellen said in a hearing of the Senate Budget Committee, adding “that may be an effect we’re seeing already in the housing market.”