There is a conventional wisdom suggesting that burdensome student debt is preventing many college graduates from purchasing a home. There is much truth to that, but the issue is more complicated than it first seems.
According to research produced by Apartment List and as reported in the Wall Street Journal, college graduates aged eighteen to thirty four years old and who do not have student debt will require a bit more than five years of additional savings to afford a twenty percent down payment for a start home, which is defined as the median home at the bottom third of the market.
By comparison, those who are college graduates but have student debt will require about ten years of additional savings. But here’s the thing. College graduates earn much more than people who end their formal education with a high school degree.
For those who haven’t graduated from college, the wait to purchase a home balloons to nearly sixteen years. This report is based on a survey of thirty one thousand respondents. Not only do people without college degrees tend to earn less, they are less likely to receive help with down payments from friends and family.