College Debt Dwarfs Housing Market’s Worth

America’s collective college debt eclipses every home listing in the nation, according to a new® report.  By Suzanne De Vita

Adding It Up
According to data from, the average down payment, 10 percent, on a median-priced property, $260,000, totals $26,000—$8,500 less than the average college loan obligation, $34,500.

The bigger picture: The amount of college debt, $1.5 trillion, exceeds every for-sale home’s worth, at $780 billion.

“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,” George Ratiu, senior economist at, says.

The biggest burdens for buyers? Look to Washington, D.C., where the average college debt is $52,581; Maryland, where the average is $39,028; and Georgia, where the average is $37,206, according to the report. On the opposite side? North Dakota ($25,940), Wyoming ($27,484) and Iowa ($27,458).

College debt has hindered homebuyers, especially millennials, who account for 34 percent of all borrowers and whose debt totals $498 billion. As a generation, their average balance is $33,000, compared to an $11,400 down payment (median).

The affordability challenge is motivating them to move, Ratiu says, especially to the Midwest and South, where there are jobs and more practically priced properties. In fact, both are home to five of the country’s 10 hottest zip codes, according to another report.

“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.”

Earlier this year, a National Association of REALTORS® report found that 61 percent of millennials believe college debt is keeping them from owning. In a more recent report, Zillow found that 24 percent of buyers were denied a mortgage as a result of their student loans.

“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,” Ratiu says. “The important implication of rising debt is that young generations are delaying major life decisions.”