Students are borrowing more money nowadays, not only causing them to face higher bills but also forcing them to delay homeownership, the study notes.
The average student loan borrower owes $34,500, which is $8,500 more than the typical down payment of $26,000. More than a quarter of millennials say that student loans are the primary barrier to saving up for a down payment, according to a separate report from the National Association of REALTORS®.
“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,” says George Ratiu, realtor.com®’s senior economist. “Student debt is already impacting borrowers’ ability to buy a home, and education debt is expected to hamper consumers’ financial decisions for many years down the road.”
The average tuition at a public university has increased by four times the rate of the average wage since 1986; private university tuition has increased by seven times the rate of average wages, the study shows.
The median sale price of a home in the U.S. is $260,000. The typical down payment is 10%, equaling $26,000 of the median price—$8,500 less than the average student debt of $34,500, the study shows.
Millennials make up the largest percentage of student borrowers at 34%. The generation’s total debt has bloomed to $498 billion, which is more than half the value of all U.S. homes for sale.
The average millennial has a loan balance of $33,000—$7,000 more than the typical down payment on the median U.S. home. The median down payment millennials make on homes is about $11,400.
"The important implication of rising debt is that young generations are delaying major life decisions," Ratiu says. “On the real estate front, the affordability crisis in major cities is driving young families to more affordable Midwestern and Southern markets, where savings for a down payment stretch much further and can turn owning a home from a future dream into today's reality.”
| National Breakdown - Down Payment vs Debt | |||||
| Total Outstanding Balance | Total Number of Borrowers | Avg Debt Per Borrower | Median Home Sale Price (July 2019) | 10% Down Payment | Down Payment vs Debt |
| 1.48 trillion | 42.8 million | $34,500 | $260,000 | $26,000 | 75.4% |
| State Breakdown - Down Payment vs Debt | ||||||
| Location | Balance (in billions) | Borrowers (in thousands) | Avg Debt Per Borrower | Median Home Sale Price (July 2019) | 10% Down Payment | Down Payment vs Debt |
| Ohio | $50.50 | 1,618 | $31,217 | $164,900 | $16,500 | 52.9% |
| Alabama | $18.20 | 548 | $33,218 | $182,000 | $17,818 | 53.6% |
| Arkansas | $9.80 | 331 | $29,607 | $181,000 | $16,700 | 56.4% |
| Michigan | $42.10 | 1,290 | $32,636 | $170,000 | $18,500 | 56.7% |
| Oklahoma | $11.70 | 405 | $28,889 | $169,500 | $16,500 | 57.1% |
| Iowa | $11.20 | 408 | $27,458 | $174,000 | $15,750 | 57.4% |
| Missouri | $23.50 | 733 | $32,064 | $163,000 | $18,738 | 58.4% |
| WestVirginia | $5.90 | 204 | $28,922 | $195,154 | $17,180 | 59.4% |
| Kentucky | $15.50 | 527 | $29,423 | $231,000 | $17,650 | 60.0% |
| Georgia | $52.90 | 1,422 | $37,206 | $205,000 | $22,980 | 61.8% |
| Indiana | $23.90 | 815 | $29,311 | $185,972 | $18,347 | 62.6% |
| Tennessee | $24.40 | 740 | $32,973 | $187,500 | $21,000 | 63.7% |
| Pennsylvania | $52.30 | 1,610 | $32,491 | $215,000 | $21,000 | 64.6% |
| SouthCarolina | $21.30 | 628 | $33,933 | $226,000 | $22,200 | 65.4% |
| Illinois | $50.70 | 1,466 | $34,589 | $222,000 | $22,700 | 65.6% |
| Nebraska | $6.40 | 223 | $28,725 | $190,000 | $19,000 | 66.1% |
| Louisiana | $16.60 | 540 | $30,729 | $205,000 | $20,450 | 66.5% |
| NorthCarolina | $38.00 | 1,128 | $33,679 | $222,450 | $23,100 | 68.6% |
| Mississippi | $12.30 | 382 | $32,207 | $235,000 | $22,501 | 69.9% |
| Wisconsin | $19.00 | 664 | $28,614 | $200,000 | $20,000 | 69.9% |
| NewMexico | $6.00 | 198 | $30,349 | $218,250 | $21,908 | 72.2% |
| Florida | $75.90 | 2,197 | $34,544 | $205,000 | $25,000 | 72.4% |
| SouthDakota | $2.90 | 102 | $28,431 | $250,000 | $20,650 | 72.6% |
| Vermont | $2.30 | 69 | $33,333 | $243,750 | $24,375 | 73.1% |
| Kansas | $10.10 | 346 | $29,174 | $230,000 | $22,115 | 75.8% |
| Maine | $5.00 | 166 | $30,102 | $238,000 | $24,250 | 80.6% |
| Minnesota | $21.90 | 724 | $30,253 | $243,100 | $24,500 | 81.0% |
| Delaware | $3.60 | 109 | $32,907 | $245,025 | $26,990 | 82.0% |
| Connecticut | $13.90 | 435 | $31,969 | $319,900 | $26,500 | 82.9% |
| Texas | $89.50 | 2,992 | $29,911 | $272,000 | $24,807 | 82.9% |
| Arizona | $24.10 | 749 | $32,193 | $215,000 | $26,800 | 83.2% |
| NorthDakota | $2.00 | 77 | $25,940 | $265,000 | $21,860 | 84.3% |
| Maryland | $28.90 | 741 | $39,028 | $268,998 | $33,053 | 84.7% |
| Virginia | $34.10 | 959 | $35,565 | $305,000 | $31,800 | 89.4% |
| NewHampshire | $5.30 | 171 | $30,940 | $317,250 | $28,000 | 90.5% |
| Idaho | $5.90 | 197 | $29,919 | $270,000 | $27,313 | 91.3% |
| Wyoming | $1.30 | 47 | $27,484 | $285,000 | $25,866 | 94.1% |
| Montana | $3.30 | 111 | $29,837 | $255,000 | $28,755 | 96.4% |
| Alaska | $1.90 | 61 | $31,148 | $280,125 | $30,049 | 96.5% |
| RhodeIsland | $3.70 | 126 | $29,459 | $279,900 | $28,500 | 96.7% |
| NewYork | $76.50 | 2,192 | $34,895 | $303,125 | $34,500 | 98.9% |
| Nevada | $8.80 | 286 | $30,812 | $308,360 | $31,000 | 100.6% |
| Oregon | $16.50 | 490 | $33,646 | $334,375 | $35,000 | 104.0% |
| NewJersey | $34.20 | 1,055 | $32,432 | $352,200 | $34,500 | 106.4% |
| Utah | $7.90 | 269 | $29,412 | $336,250 | $33,000 | 112.2% |
| Districtof Columbia | $5.50 | 105 | $52,581 | $385,000 | $60,000 | 114.1% |
| Colorado | $22.90 | 686 | $33,401 | $625,783 | $38,250 | 114.5% |
| Washington | $22.60 | 706 | $32,016 | $387,700 | $38,500 | 120.3% |
| Massachusetts | $25.70 | 814 | $31,584 | $430,000 | $42,200 | 133.6% |
| California | $116.00 | 3,429 | $33,832 | $515,000 | $51,000 | 150.7% |
| Hawaii | $3.60 | 108 | $33,395 | $537,050 | $57,500 | 172.2% |
Source: realtor.com®
