Zillow calculates impact on renters hoping to buy
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Potential first-time buyers who are currently renting will see their homebuying budget slashed by $92,440 if they are carrying student loan debt.
An analysis by Zillow has found that the average monthly student debt payment for renters planning to buy in the next 12 months is $388. On that basis, if they want to cap their spending on a mortgage and student debt at 30%, their budget would be $269,400.
While that figure would give them the choice of 52.3% of homes currently listed for sale, those without student debt could afford 66.4% of current listings with a budget of $361,800.
"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,” 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."
Around a third of renters planning to buy a home in the next year have student debt for themselves or someone else.
The analysis shows how the impact of student debt affects the choice of homes affordable in different markets across the country.
|
Metropolitan Area |
Max Home |
Share of |
Max |
Share of |
Median Home 2018 |
|
United States |
$ 269,400 |
52.3% |
$ 361,800 |
66.4% |
$ 220,100 |
|
New York, NY |
$ 357,300 |
29.4% |
$ 449,700 |
40.9% |
$ 431,000 |
|
Los Angeles-Long Beach- |
$ 326,700 |
6.3% |
$ 419,200 |
13.5% |
$ 647,100 |
|
Chicago, IL |
$ 320,500 |
58.8% |
$ 413,000 |
71.9% |
$ 222,200 |
|
Dallas-Fort Worth, TX |
$ 308,700 |
45.0% |
$ 401,100 |
64.0% |
$ 233,200 |
|
Philadelphia, PA |
$ 320,500 |
68.6% |
$ 413,000 |
79.3% |
$ 229,300 |
|
Houston, TX |
$ 292,200 |
48.1% |
$ 384,600 |
65.3% |
$ 200,900 |
|
Washington, DC |
$ 507,600 |
62.0% |
$ 600,000 |
71.1% |
$ 401,000 |
|
Miami-Fort Lauderdale, FL |
$ 227,900 |
21.4% |
$ 320,300 |
38.3% |
$ 278,400 |
|
Atlanta, GA |
$ 300,400 |
52.3% |
$ 392,800 |
66.8% |
$ 209,700 |
|
Boston, MA |
$ 423,500 |
38.1% |
$ 515,900 |
51.0% |
$ 458,000 |
|
San Francisco, CA |
$ 528,000 |
16.4% |
$ 620,500 |
26.0% |
$ 961,200 |
|
Detroit, MI |
$ 257,900 |
62.0% |
$ 350,400 |
76.1% |
$ 157,200 |
|
Riverside, CA |
$ 276,000 |
29.0% |
$ 368,400 |
49.4% |
$ 362,000 |
|
Phoenix, AZ |
$ 276,700 |
40.3% |
$ 369,100 |
60.5% |
$ 258,300 |
|
Seattle, WA |
$ 410,100 |
33.8% |
$ 502,500 |
48.5% |
$ 486,600 |
|
Minneapolis-St Paul, MN |
$ 365,800 |
60.7% |
$ 458,200 |
73.3% |
$ 263,300 |
|
San Diego, CA |
$ 357,800 |
9.7% |
$ 450,300 |
20.2% |
$ 589,200 |
|
St. Louis, MO |
$ 281,300 |
73.3% |
$ 373,800 |
82.9% |
$ 163,100 |
|
Tampa, FL |
$ 227,900 |
43.9% |
$ 320,300 |
65.4% |
$ 208,400 |
|
Baltimore, MD |
$ 392,500 |
67.2% |
$ 484,900 |
77.0% |
$ 265,600 |
|
Denver, CO |
$ 365,800 |
32.0% |
$ 458,300 |
50.6% |
$ 398,400 |
|
Pittsburgh, PA |
$ 260,300 |
72.6% |
$ 352,700 |
82.7% |
$ 142,300 |
|
Portland, OR |
$ 345,800 |
26.2% |
$ 438,200 |
46.8% |
$ 391,400 |
|
Charlotte, NC |
$ 286,400 |
44.4% |
$ 378,800 |
62.5% |
$ 199,400 |
|
Sacramento, CA |
$ 313,900 |
24.3% |
$ 406,400 |
44.5% |
$ 400,600 |
|
San Antonio, TX |
$ 259,300 |
54.4% |
$ 351,800 |
71.5% |
$ 187,800 |
|
Orlando, FL |
$ 235,800 |
34.7% |
$ 328,200 |
59.0% |
$ 231,000 |
|
Cincinnati, OH |
$ 284,800 |
66.1% |
$ 377,200 |
78.8% |
$ 164,500 |
|
Cleveland, OH |
$ 232,600 |
69.8% |
$ 325,000 |
81.9% |
$ 142,700 |
|
Kansas City, MO |
$ 291,900 |
61.8% |
$ 384,400 |
76.3% |
$ 185,500 |
|
Las Vegas, NV |
$ 251,400 |
29.3% |
$ 343,900 |
57.0% |
$ 273,800 |
|
Columbus, OH |
$ 284,500 |
58.4% |
$ 376,900 |
71.0% |
$ 184,200 |
|
Indianapolis, IN |
$ 263,400 |
63.3% |
$ 355,900 |
76.6% |
$ 157,200 |
|
San Jose, CA |
$ 610,800 |
11.7% |
$ 703,200 |
18.3% |
$ 1,288,700 |
|
Austin, TX |
$ 356,800 |
52.5% |
$ 449,300 |
66.7% |
$ 300,600 |
