Student Debt Reduces Buyers’ Budgets by Nearly $100,000

Carrying student debt, whether for themselves or someone else, limits potential home buyers’ budgets by $92,440, leaving fewer homes on the market they can afford.

The average monthly student debt payment for renters who plan to buy a home in the next year is $388, according to the Zillow® Housing Aspirations Report. The maximum priced home a buyer with student debt could afford is $269,400, if they spend no more than 30 percent of their income on combined housing and student debt. At this price point, they could buy 52.3 percent of homes currently listed for sale.

For a buyer with no student debt seeking to spend the same share of income, the buying limit would increase to $361,800, and they could afford to buy 66.4 percent of available homes nationwide.


Student debt reached record levels this year, with the total amount at $1.56 trillion in the third quarter of 2018. Paying off student loans also makes it harder to set aside money for a down payment, which is one of the top barriers to homeownership. And saving for that down payment takes longer than it did for previous generations.

“Higher education pays off when it comes to lifetime earnings and the long-term odds of homeownership, but carrying any kind of debt limits how much home buyers can afford. For today’s generation of young home buyers, who came of age in a period of rapidly rising education costs, student debt payments can delay the pace of down payment savings and put a dent in their max price point once they do decide to buy,” said Zillow Senior Economist Aaron Terrazas. “With for-sale supply still tightest for the most affordable homes but increasingly available at higher prices, even a small reduction in a buyer’s target price point can result in substantially fewer options.”

Nationwide, about one third (33.9 percent) of renters who are planning to buy a home in the next year have some form of student debt, whether it is for themselves or someone else.

Metropolitan AreaMax Home
Share of
Price, No
Share of
No Student
Median Home
United States$ 269,40052.3%$ 361,80066.4%$ 220,100
New York, NY$ 357,30029.4%$ 449,70040.9%$ 431,000
Los Angeles-Long Beach-
Anaheim, CA
$ 326,7006.3%$ 419,20013.5%$ 647,100
Chicago, IL$ 320,50058.8%$ 413,00071.9%$ 222,200
Dallas-Fort Worth, TX$ 308,70045.0%$ 401,10064.0%$ 233,200
Philadelphia, PA$ 320,50068.6%$ 413,00079.3%$ 229,300
Houston, TX$ 292,20048.1%$ 384,60065.3%$ 200,900
Washington, DC$ 507,60062.0%$ 600,00071.1%$ 401,000
Miami-Fort Lauderdale, FL$ 227,90021.4%$ 320,30038.3%$ 278,400
Atlanta, GA$ 300,40052.3%$ 392,80066.8%$ 209,700
Boston, MA$ 423,50038.1%$ 515,90051.0%$ 458,000
San Francisco, CA$ 528,00016.4%$ 620,50026.0%$ 961,200
Detroit, MI$ 257,90062.0%$ 350,40076.1%$ 157,200
Riverside, CA$ 276,00029.0%$ 368,40049.4%$ 362,000
Phoenix, AZ$ 276,70040.3%$ 369,10060.5%$ 258,300
Seattle, WA$ 410,10033.8%$ 502,50048.5%$ 486,600
Minneapolis-St Paul, MN$ 365,80060.7%$ 458,20073.3%$ 263,300
San Diego, CA$ 357,8009.7%$ 450,30020.2%$ 589,200
St. Louis, MO$ 281,30073.3%$ 373,80082.9%$ 163,100
Tampa, FL$ 227,90043.9%$ 320,30065.4%$ 208,400
Baltimore, MD$ 392,50067.2%$ 484,90077.0%$ 265,600
Denver, CO$ 365,80032.0%$ 458,30050.6%$ 398,400
Pittsburgh, PA$ 260,30072.6%$ 352,70082.7%$ 142,300
Portland, OR$ 345,80026.2%$ 438,20046.8%$ 391,400
Charlotte, NC$ 286,40044.4%$ 378,80062.5%$ 199,400
Sacramento, CA$ 313,90024.3%$ 406,40044.5%$ 400,600
San Antonio, TX$ 259,30054.4%$ 351,80071.5%$ 187,800
Orlando, FL$ 235,80034.7%$ 328,20059.0%$ 231,000
Cincinnati, OH$ 284,80066.1%$ 377,20078.8%$ 164,500
Cleveland, OH$ 232,60069.8%$ 325,00081.9%$ 142,700
Kansas City, MO$ 291,90061.8%$ 384,40076.3%$ 185,500
Las Vegas, NV$ 251,40029.3%$ 343,90057.0%$ 273,800
Columbus, OH$ 284,50058.4%$ 376,90071.0%$ 184,200
Indianapolis, IN$ 263,40063.3%$ 355,90076.6%$ 157,200
San Jose, CA$ 610,80011.7%$ 703,20018.3%$ 1,288,700
Austin, TX$ 356,80052.5%$ 449,30066.7%$ 300,600


  1. Evil One’s comment is right on. However, so many young people would miss out on the opportunity to go into debt with little hope of repaying it due to bogus courses of study and furthermore, they would also miss out on indoctrination into the authoritarian Leftist political creed of their “professors”.

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