Although the constant and growing pressure of student debt has prevented many people from buying a home, possession of a bachelor’s degree is still widely seen as a stepping stone to entering the housing market.
The number of adults with tertiary education has only increased over the past decade, with rates increasing by 18% from 2010 to 2020, while over the same period, rates among those with a high school diploma dropped by 8%. This means that homeownership rates have skewed those with higher education.
These data come from a new analysis of Dot2a subsidiary of Yardi Systems Inc.using new and existing United States Census Bureau The data.
According to Point2, millennials are a key demographic to watch as they are now entering the early years of their life to buy a home. But as economic pressure mounts, millennials have been found to put off major life decisions, like having kids or buying a home, at a faster rate than their predecessors in order to get their house in order. in their finances and education.
“So while factors such as fluctuations in mortgages or volatility in the housing market may explain the nationwide inability to own a home, this generational shift could respond to the increased ability of graduates,” said declared Alexandra Ciuntu, author of the report and editor for Point2. “We turned to the latest US Census data to determine the correlation between an individual’s level of education and their chances of home ownership in the United States. The results highlight the idea that more the higher the education, the higher the income, the closer one comes to the American Dream of home ownership.
Unsurprisingly, our country’s seat of government, Washington DC, has the highest number of college-educated homeowners, now at 76%. Massachusetts is the state with the second highest number of homeowners who also hold a bachelor’s degree (53%), likely due to the at least 100 institutes of higher education residing within its borders. Wyoming is also on the list of states with the most homeowners with at least an associate’s degree (38%).
The average annual income of a graduate was $56,150, while those with a high school diploma earned $25,350 per year. The median income of an owner household (nearly $81,400) is almost double that of renter households ($42,150) in the United States, but it should be noted that this census data is skewed because renters live usually alone while the owners live together.
“In the United States, 40% of owners have at least a bachelor’s degree, while 30% have a college or associate’s degree, bringing owners with a degree to 70% in the United States,” Ciuntu said. “Alternatively, 23% have a high school diploma and only 7% of US owners have less than a high school diploma.”
It should be noted that the share of owners without a high school diploma has dropped by 30% since the last census in 2010, while those with a bachelor’s degree have increased by 18%.
“These declines in the number of owners with a high school diploma (down 13%) or less than a high school diploma indicate that the American dream is more likely to become a reality for those with a diploma. “, continued Ciuntu. “As such, education is key to eventually owning a home and is linked to higher income levels and a higher likelihood of getting a mortgage despite student loans. Educated people looking for a loan are also more attractive candidates for lenders.
Click here to see a full copy of the report, which includes interactive maps and data on their findings.