Study Ties Home Buying Decline To Education

Mortgage applicants are more likely to qualify with a higher education

Study Ties Home Buying Decline To Education
May 6, 2016

According to the Homeownership Progress Index published by the First American Financial Corporation, there is a direct correlation between education and homeownership. The study shows that homeownership has declined since 2005, when it hit its peak, and is now just above its 25-year low mark by only 0.4 percent. These figures can be connected directly to statistics related to education, because those who hold a bachelor’s degree are more likely to have higher paying jobs, which usually translates into being better able to afford a mortgage.

The number of individuals graduating from college has increased since the early 1990s. There are now 24 percent more households comprised of at least one person with a bachelor’s degree, and experts anticipate that number will increase as more millennials complete their education. Looking at education in connection with homeowners illuminates a major gap between those with only a high school diploma and those who have graduated college. In 1990, 15 percent more of those with a college degree owned homes. By 2015, that gap had increased, with 28 percent more college graduates owning homes than high school graduates.

Analyzing markets that have higher educational rates also shows a correlation, as more people in those areas tend to own homes. As the educational gap widens and forces the income gap to increase, those who do not have a college education may find that they simply cannot afford to own their own home.

Moneytips can help you refinance your existing home loan.

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Steffanie | 05.06.16 @ 15:37
Wow, never thought of that connection. It seems like going to college would give you too much debt to be able to own a home.
irene | 05.06.16 @ 15:39
Wouldn't that be directly relayed to their earning potential?
Nancy | 05.06.16 @ 15:40
Interesting connection. Certainly different than even my generation where homes were more affordable for everyone, education or not.
Carla | 05.06.16 @ 15:40
It is sad that those who cannot get an education for one reason or another are struggling to afford a home. Wage increases would be helpful to a lot of people.
Alec | 05.06.16 @ 15:40
I didn't know there was a connection between higher education and being a home owner. I guess it is good for my husband and I since we are looking to buy a house soon and he just graduated from college a couple of months ago. It makes me a little sad though because things are already hard for those without access to higher education. With them being less likely to own a home, it makes it worse.
trish | 05.06.16 @ 15:45
Interesting connection, but wondering how comfortable a recent grad would be to buying a house...especially with tuition debt. and sad to know that those who cannot afford higher education, are now also are less likely to be able to afford a home.
Beverly | 05.06.16 @ 15:48
I never would have thought about this, but in some ways it does make sense. I would Hope that their income would be a bigger factor though.
Selena | 05.06.16 @ 15:50
Makes sense. Jobs that don't require a higher education don't pay enough for a person to even consider putting money on a house. Most people in this category struggle just to pay their bills.
$commenter.renderDisplayableName() | 11.28.20 @ 01:36