State-by-State Analysis Reveals Sharp Gaps in Homebuying Timelines for New College Graduates
A new MortgageResearch.com analysis paints a sobering picture for the Class of 2025: The average new college graduate is unlikely to be able to afford a home until April 2034 — nearly a full decade after graduation — due to a triple threat of skyrocketing home prices, student loan debt and modest starting salaries.
The study estimates how long it would take graduates in each state to save a 10% down payment, factoring in average starting salaries, home values and federal student loan payments. Although the national average points to a nine-year savings journey, the timeline varies drastically depending on geography.
In West Virginia, new grads can expect to purchase a home in just 4.9 years, becoming homeowners by April 2030. But in Hawaii, where the average 10% down payment exceeds $98,000, it could take nearly 18 years, delaying homeownership until February 2043.
“These numbers highlight how geography influences the path to homeownership for first-time buyers,” said Tim Lucas, lead analyst at MortgageResearch.com. “Where you land your first job and choose to live can be just as important as your degree. But it’s not just about home prices. Even in more affordable markets, it’s the weight of student loan debt that often dictates how long new grads will wait before they can buy a home.”
Aggressive Savings, Slim Returns
The study assumes an ambitious savings model: graduates devote 13.8% of their gross income toward student loan payments and a future down payment, nearly three times the national personal saving rate reported by the Bureau of Economic Analysis.
The average 2025 graduate is projected to earn $64,598 annually, according to Legacy Online School. Graduates without student loans could save around $743 per month. Once the typical $410 monthly student loan payment is made, graduates are left with $333 to put toward saving for a down payment.
The analysis found that student loan debt delays homeownership by an average of 4 years and 8 months. Without student debt, a graduate could buy a home by August 2029. But with debt, the target shifts to April 2034.
Student Loan Debt Delays Homeownership, Even in Affordable Markets
Even in markets with lower home prices, the burden of student loan debt can significantly delay homeownership. While lower home prices may initially seem like an advantage, they don’t always lead to faster home purchases for recent grads, as student debt often erodes the ability to save for a down payment.
For example, in Mississippi, where the average home price is just $180,641, the lower cost of housing might seem to provide a quicker path to homeownership. However, with an average starting salary of only $52,266, new grads can save just $177 per month after student loan payments. This results in a homebuying horizon pushed to October 2033, despite the relatively affordable home prices.
Similarly, in West Virginia, where homes cost $167,346 on average, the potential to buy a home sooner is undercut by the same challenge of student loan debt. Graduates may have a lower down payment goal, but they’ll still face delays due to limited savings capacity.
In contrast, new grads in metros like Washington, D.C., where the average starting salary is the highest in the nation ($79,235), still face significant delays due to the weight of student debt. Washington, D.C., grads carry an average student loan balance of $54,795, and with high home prices ($723,888), their purchase date is delayed until October 2038, more than 13 years after graduation.
Pathways to Accelerate Homeownership
Despite the bleak averages, Lucas noted first-time buyers have options to shorten the wait, including exploring
- Zero-down options: USDA and VA loans offer 0% down payment programs for eligible buyers.
- Low-down programs: FHA and conventional loans may require just 3%.
- Seller concessions: Buyers can negotiate to have sellers cover closing costs.
- Graduation gifts: Recent changes to lending guidelines allow monetary gifts from family — and even non-relatives — to be used as down payments without requiring a gift letter (subject to certain conditions).
“The housing market is the toughest it’s been for first-time buyers since the 1980s,” he said. “But if new grads continue their learning about the housing market and available programs, they can close the gap faster. Their next diploma will come with a set of keys.”
To view the full report, including methodology details, please visit: https://www.mortgageresearch.com/articles/college-graduates-homebuying-timeline/
SOURCE Mortgage Research Center
