Dive Brief:
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College graduates may earn more than those who stopped their education after high school, but they tend to take longer to save down payments and buy their first homes, according to a new study from Trulia.
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In almost one-third of the Top 100 U.S. real estate markets, saving a 20% down payment is quicker for those without university diplomas, the report said. The reason: The difference in salaries of college vs. high school grads is slim in those markets. Plus, college grads have an average of $26,000 in student debt to pay off — an obstacle to saving for a home.
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In a handful of cities, including Detroit and four in Ohio — Akron, Dayton, Cleveland and Toledo — college graduates can save a down payment faster than those who skipped the halls of ivy, according to Trulia housing economist Ralph McLaughlin.
Dive Insight:
"Saving for a down payment is one of the biggest obstacles to homeownership," McLaughlin wrote in a blog this week.
But in some cities, like Las Vegas, Columbia, SC, and El Paso, TX, home buyers without college degrees are able to save up down payments at least a year and a half quicker than young adults with diplomas, Trulia said.
Still, in some housing markets — mostly in California, "a college degree is the ticket to saving for a 20% down payment," McLaughlin wrote. Even then, however, those potential homeowners "will start to show gray hairs by the time they've saved up enough," as it would take 29.4 years for a 25- to 30-year-old to amass the needed funds.
