Mortgage Research Network Podcast

Welcome to the Mortgage Research Network Podcast. Just a note that this podcast audio is AI-generated, but the article on which it's based was produced by people. Content is also reviewed for accuracy. And your hosts, Tim and Craig, are real people. Without further ado, let's get into today's topic.
I'm your host, Tim Lucas, editor of MortgageResearch.com and a former mortgage professional, and with me is Craig Berry, a mortgage originator with 25 years experience.
Hey everyone. Thanks for tuning in to another episode.
Today we're talking about how long it takes to buy a house after graduating from college. And it appears the American Dream just got a new timeline. the Class of 2025 won't be able to afford their first home until 2034. That's nearly a decade of waiting after graduation just to get their own set of keys.
Those numbers are staggering. What's causing such a massive delay for an entire generation?
Well, we looked at how long it might take to save a 10% down payment, factoring in new college grad salaries, savings rates, student loan payments, and more. And the result wasn't encouraging in most areas of the U.S. It's this perfect storm hitting graduates all at once. we're talking high home prices, crushing student loan debt averaging $410 monthly, and starting salaries that barely keep up with basic living expenses.
And I imagine this varies quite a bit depending on where you live?
For sure. Take West Virginia versus Hawaii. in West Virginia, graduates could be homeowners in just under 5 years. But in Hawaii? They're looking at waiting until 2043. that's almost 18 years of saving just for a down payment of nearly $100,000!
That geographic divide is fascinating. What about other states with supposedly affordable housing?
Well, that's where it gets really interesting. Like Mississippi. they have some of the lowest home prices in the country at around $180,000, but the starting salaries there are so low, around $52,000, that graduates can only save about $177 per month.
And then you've got Washington D.C. with the highest starting salary in the nation, right?
Exactly. D.C. offers nearly $80,000 to start, but here's the catch. they also have the highest student debt at almost $55,000. So those graduates are looking at waiting until October 2038 to buy a home. It's like giving someone a bigger shovel to dig out of a deeper hole.
You know what really strikes me about these projections? The assumptions about savings rates seem pretty optimistic.
That's putting it mildly! The study assumes people are saving 13.8% of their income. that's THREE TIMES higher than the current national average. And remember, this is while paying those student loans, rent, food, and transportation.
So what's the actual impact of student loans on this timeline?
Here's the math. without student loans, these graduates could potentially buy a home by August 2029. Add in that debt? They're waiting until April 2034. That's nearly five extra years without a home of their own.
Though there are some alternative paths to homeownership, aren't there?
Yes, and this is crucial information for graduates to understand. There are USDA loans with zero down payment for moderate-income buyers, VA loans for veterans, and FHA loans with lower down payments. Plus, lending rules are flexible about using gift money for down payments.
But doesn't that create another layer of inequality between those who have family help and those who don't?
Exactly right, and what's particularly concerning is that this study doesn't even factor in private student loans or potential increases in home prices. We could be looking at an even more challenging situation than these projections suggest.
Though I suppose there could be some positive factors they didn't include, like salary increases or dual-income households?
True. There are ways for new college grads to speed up the timeline. Even if they're not planning to get hitched, why not go into homebuying with a friend or business partner? And, every raise or job hop that results in more dollars will help. But here's what's concerning, we're seeing fundamental changes in how the American Dream works for this generation. When an entire cohort has to wait an extra 5 to 15 years to buy homes, that reshapes everything, from family formation, to retirement planning, to community building.
So what's the key takeaway for recent graduates facing this reality?
Look, the path to homeownership might be longer than ever, but it's not impossible. It requires a different kind of financial literacy, understanding alternative financing options, being strategic about location choices, and finding that sweet spot where starting salaries, housing costs, and student debt loads align.
And for society as a whole?
We need to have serious conversations about whether this is the future we want. When the average graduate has to wait until their mid-thirties just to buy a starter home, that's not just a personal finance issue, it's a societal challenge that affects everything from economic mobility to demographic trends. The American Dream isn't dead, but it definitely needs a new roadmap.
That's about all the time we have for this topic, but we go into even more detail on the site. To learn more, go to Mortgage research.com and type college grad homebuying in the search bar on the homepage. We'll see you next time on the Mortgage Research Network Podcast.