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As U.S. student-debt balances have soared in recent years, the ability of graduates to buy a home has dwindled.
Today, some 42.8 million people owe around $1.5 trillion on their student loans, an amount that is nearly twice as large as the total value of the home available for sale across the country at $780 billion, according to a new report from Realtor.com.
In some states, however, the average student-debt holder has a much easier time making the dream of homeownership into a reality. To determine this, Realtor.com compared the amount of money it would cost to make a 10% down payment on a median-priced home with the average student-loan balance per borrower in each state.
(Realtor.com is operated by News Corp subsidiary Move Inc., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)
Ohio had the most affordable down payment based on this analysis — the average down payment in the Buckeye State is roughly half the size of the average borrower’s outstanding student-loan debt. At the other end of the spectrum: Hawaii’s average down payment was nearly twice as large as the average student-loan balance.
Millennials are particularly hamstrung with student debt, making up a third of all student-loan borrowers. The average loan balance among millennials is $33,000. That’s nearly three times higher than the median down payment among this generation of $11,400, Realtor.com found.
“Student debt has ballooned to an all-time high as the price of education continues to outpace wage growth, and this is holding back many potential buyers from being able to purchase a home,” Realtor.com senior economist George Ratiu said in the report. “The important implication of rising debt is that young generations are delaying major life decisions.”
Here is how the comparison between student debt and down payments broke down for each state:
| State | Average student debt
per borrower |
Median home
sale price |
Value of
10% down payment |
Down payment
vs. debt |
| Ohio | $31,217 | $164,900 | $16,500 | 52.9% |
| Alabama | $33,218 | $182,000 | $17,818 | 53.6% |
| Arkansas | $29,607 | $181,000 | $16,700 | 56.4% |
| Michigan | $32,636 | $170,000 | $18,500 | 56.7% |
| Oklahoma | $28,889 | $169,500 | $16,500 | 57.1% |
| Iowa | $27,458 | $174,000 | $15,750 | 57.4% |
| Missouri | $32,064 | $163,000 | $18,738 | 58.4% |
| West Virginia | $28,922 | $195,154 | $17,180 | 59.4% |
| Kentucky | $29,423 | $231,000 | $17,650 | 60.0% |
| Georgia | $37,206 | $205,000 | $22,980 | 61.8% |
| Indiana | $29,311 | $185,972 | $18,347 | 62.6% |
| Tennessee | $32,973 | $187,500 | $21,000 | 63.7% |
| Pennsylvania | $32,491 | $215,000 | $21,000 | 64.6% |
| South Carolina | $33,933 | $226,000 | $22,200 | 65.4% |
| Illinois | $34,589 | $222,000 | $22,700 | 65.6% |
| Nebraska | $28,725 | $190,000 | $19,000 | 66.1% |
| Louisiana | $30,729 | $205,000 | $20,450 | 66.5% |
| North Carolina | $33,679 | $222,450 | $23,100 | 68.6% |
| Mississippi | $32,207 | $235,000 | $22,501 | 69.9% |
| Wisconsin | $28,614 | $200,000 | $20,000 | 69.9% |
| New Mexico | $30,349 | $218,250 | $21,908 | 72.2% |
| Florida | $34,544 | $205,000 | $25,000 | 72.4% |
| South Dakota | $28,431 | $250,000 | $20,650 | 72.6% |
| Vermont | $33,333 | $243,750 | $24,375 | 73.1% |
| Kansas | $29,174 | $230,000 | $22,115 | 75.8% |
| Maine | $30,102 | $238,000 | $24,250 | 80.6% |
| Minnesota | $30,253 | $243,100 | $24,500 | 81.0% |
| Delaware | $32,907 | $245,025 | $26,990 | 82.0% |
| Connecticut | $31,969 | $319,900 | $26,500 | 82.9% |
| Texas | $29,911 | $272,000 | $24,807 | 82.9% |
| Arizona | $32,193 | $215,000 | $26,800 | 83.2% |
| North Dakota | $25,940 | $265,000 | $21,860 | 84.3% |
| Maryland | $39,028 | $268,998 | $33,053 | 84.7% |
| Virginia | $35,565 | $305,000 | $31,800 | 89.4% |
| New Hampshire | $30,940 | $317,250 | $28,000 | 90.5% |
| Idaho | $29,919 | $270,000 | $27,313 | 91.3% |
| Wyoming | $27,484 | $285,000 | $25,866 | 94.1% |
| Montana | $29,837 | $255,000 | $28,755 | 96.4% |
| Alaska | $31,148 | $280,125 | $30,049 | 96.5% |
| Rhode Island | $29,459 | $279,900 | $28,500 | 96.7% |
| New York | $34,895 | $303,125 | $34,500 | 98.9% |
| Nevada | $30,812 | $308,360 | $31,000 | 100.6% |
| Oregon | $33,646 | $334,375 | $35,000 | 104.0% |
| New Jersey | $32,432 | $352,200 | $34,500 | 106.4% |
| Utah | $29,412 | $336,250 | $33,000 | 112.2% |
| District of Columbia | $52,581 | $385,000 | $60,000 | 114.1% |
| Colorado | $33,401 | $625,783 | $38,250 | 114.5% |
| Washington | $32,016 | $387,700 | $38,500 | 120.3% |
| Massachusetts | $31,584 | $430,000 | $42,200 | 133.6% |
| California | $33,832 | $515,000 | $51,000 | 150.7% |
| Hawaii | $33,395 | $537,050 | $57,500 | 172.2% |
The post This Is the Most Affordable Housing Market for Buyers With Student Debt appeared first on Real Estate News & Insights | realtor.com®.
source https://www.realtor.com/news/trends/this-is-the-most-affordable-housing-market-for-buyers-with-student-debt/
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