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Trulia Blog

How Do Student Loans Affect Saving for a Home?

How Do Student Loans Affect Saving for a Home?
Trulia calculated just how much time it could take to save a down payment on a home with — or without — a college degree.

If you’ve been paying attention to the news, then you know that college debt is on the rise. In fact, most economists and newsmakers are calling it a crisis.

Even saddled with student loan debt, most people assume that having a college degree will make it that much easier to save for a home — since a degree often adds up to a higher wage. Think again.

Ralph McLaughlin, Trulia’s housing economist, tallied up the numbers to find out how student loans affect saving for a home. The calculations factor in both the projected household income growth of those with or without a college degree over a lifetime and the projected increase in real estate prices while that household is saving for a traditional 20% down payment. And for households with a college degree, he factored in the additional expense of student loan repayment. The results equal a timeline for how long college graduates and nongraduates can expect to save for a home across the U.S. (You can find a detailed breakdown of the methodology here.)

The most expensive areas for both graduates and nongraduates to save for a home are clustered on the West Coast. In San Francisco, for example, college graduates can expect to spend nearly 30 years saving up for a home. Living in San Francisco with no degree? Unfortunately, it’s nearly impossible to save for a home in the city, where listing prices average near $1 million.

But there is good news! There are some metros, including Camden, NJ, and Dayton, OH, where it’s affordable for all to save for a home. In others, like El Paso, TX, and Columbia, SC, it might even be faster for those without a degree to save for a home.

Of course, individuals with a college degree statistically have a higher income over their lifetime than those without. So even though student loans may affect your ability to save quickly for a home, a college degree will pay off over time — and potentially make it easier for you to buy that dream home later in life.

College Degree Infographic