College graduates can buy a home much faster than those who don't have a degree, according to new research from Apartment List.
The rental listing website surveyed 31,000 respondents about their finances and determined their ability to afford a 20% down payment for a starter home, that is, the median home price at the bottom third of the market.
College graduates between the ages of 18 and 34 without student loans will need just over five years to afford the down payment, college graduates with student loans will need 10 years, and those without a college degree will need 15.5 years.
"It's really everywhere that people without college degrees won't be able to afford homes. They could be stuck renting for a long time," says Andrew Woo, director of data science at Apartment List.
People without a college degree tend to have lower incomes, but they are also less likely to receive financial help from friends and family. On average, college graduates without student debt receive more than $8,000 in financial assistance, graduates with student loans receive about $4,000, and those without a college degree receive just over $2,000.
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In San Jose, California—the second priciest city for starter homes after San Francisco—college graduates without student debt would need to save for 4.5 years to afford a 20% down payment on a home, graduates with student debt would need 15 years, and those without a college degree would need to save for a whopping 48 years.
In Austin, Texas, which is far more affordable by comparison, home ownership is still a stretch for those without a college degree. They would need to save for 23 years to make a down payment on a home, while college graduates with student debt would need to save for eight years, and those without debt would need to save for four years (Kusisto, Wall Street Journal, 5/22; Wang, Quartz, 5/23).
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