Homeownership by Education: Degree-Holding Owners Surge as Those Without High School Drop 30%
Despite the costs associated with college and growing student loan debt, a degree is a stepping stone to eventually becoming a homeowner. In 2020, we had 18% more bachelor’s degree holders compared to 2010, while the share of high school graduates dipped by 8% during the same timeframe. Consequently, homeownership rates rose among people with a level of education above a high school diploma.
Although there are 4% fewer owned homes in the United States than there were in 2010, homeownership among highly educated people has grown steadily since. And, with Millennials cementing their status as a driving force during the last decade, the life priorities of this pragmatic generation are reflected in the socio-economical makeup of today’s United States. Compared to Baby Boomers and Gen Xers, Millennials are more prone to postponing traditional life decisions — like starting a family and buying a house — in favor of gaining education and financial independence first.
So, while factors such as mortgage fluctuations or housing market volatility may explain the nationwide inability to own a home, this generational shift could answer for the increased ability of those with a degree.
We turned to the latest U.S. Census data to pin down the correlation between an individual’s education level and their chance at homeownership in the U.S. The findings highlight the idea that the higher the education, the higher the income, and the closer one gets to the American dream of homeownership. Here are the main highlights:
- Washington, D.C. has the most homeowners with at least a bachelor’s degree, while Wyoming counts the most with an associate’s degree or similar.
- The median income of bachelor’s degree holders ($56,150) is more than double that of someone without a high school diploma ($25,350), leading to higher chances for better credit and a mortgage.
- More than 80% of individuals with degrees in Education, Industry, and Agriculture live in owned homes, while IT and Art grads are among the least likely to own a home (67% and 66%, respectively).
- Most homeowners live in Eastern and Midwestern states, including Maine, Minnesota, Delaware and South Carolina.
- West Virginia boasts the highest homeownership rate: 74%.
Degree-Holders Make Up Majority of American Homeownership; D.C. Homeowners Highest Educated
In the U.S., 40% of homeowners have at least a bachelor’s degree, while 30% have some college or an associate’s degree, putting degree-holding homeowners at 70% in the United States. Alternatively, 23% have a high school diploma and just 7% of American homeowners have less than a high school education.
Notably, since 2010, the share of homeowners without a high school education has dropped by 30%, while those with a bachelor’s degree has increased by 18%. These declines in homeowners with a high school education (down 13%) or less than a high school diploma indicate that the American dream is more likely to become a reality for degree-holders. As such, education is key to eventually owning a home and is linked to high income levels and a higher likelihood to land a mortgage despite student loans. Educated individuals who are seeking a loan are also more attractive candidates to lenders.
Washington, D.C. is home to the highest percentage of homeowners with at least a bachelor’s degree: 76%. Conversely, it’s also the place with the fewest homeowners with an alternative degree, such as an associate’s (13%), making a traditional higher education path more common in a legal and political job hub like the District of Columbia.
The second-highest percentage of homeowners with bachelor’s degrees or higher live in Massachusetts (53%). Home to Harvard University, MIT, Tufts University, and more than 100 other institutes of higher education, Massachusetts is one of the most popular destinations to go to college, as well as to continue in postgrad.
Perhaps surprisingly, Wyoming claims the most homeowners with an associate’s or similar degree: 38%. Although the state doesn’t have many colleges (the third-lowest number after Alaska and Delaware), it does offer innovative degree programs. And, while the homeownership rate dropped or stagnated in the rest of the country, tax-friendly Wyoming and Hawaii were the only exceptions: In these states, the percentage rose by 1% and 2%, respectively.
As the second-most affordable state to buy a home in (after Mississippi) and with a median home value of $115,000, West Virginia is an attractive option regardless of educational background. In fact, West Virginia has the most homeowners with a high school education: 38%. Meanwhile, despite having the smallest percentage of homeowners with a bachelor’s degree (25%), West Virginia had the highest increase among homeowners within this educational bracket. The 10th-smallest state also has 44 institutes of higher education and also offers access to hailed colleges in neighboring states, such as the University of Pennsylvania, Johns Hopkins University, the University of Virginia, and The Ohio State University.
Education Level Influences Income, But So Does the State One Lives In
It’s worth noting that the median income in an owned household (nearly $81,400) is almost double that of rental households ($42,150) in the U.S. Granted, that’s not to say that homeowners necessarily earn more than renters. Rather, more renters tend to live alone compared to homeowners, who typically move in as couples or with family in tow.
Even so, there are disparities in median personal income when we consider education attainment among homeowners. In particular, the median income of an individual in the U.S. with a bachelor’s degree is more than double that of someone without a high school diploma: That’s almost $56,150 versus $25,350.
For comparison, those with a bachelor’s degree in Montana earn the least within their educational bracket (just over $42,700). But, that’s still more than the highest median income of someone with a high school diploma ($37,900 in Massachusetts) or no high school education ($30,800 in North Dakota).
Once again D.C. sets itself apart, this time with the highest income among bachelor’s degree-holders at almost $71,850. The second-highest median income for degree-holders is about a three-hour drive away in New Jersey at $67,850. As for those with an associate’s or similar degree, Alaska and Maryland offer the highest median income within this education segment: $45,900 and $45,400, respectively.
Education & Agriculture Grads More Likely to Own a Home Than IT Degree-Holders
It’s not just the level of education, but the right qualifications that can influence someone’s homeownership plans. In other words, certain degrees — commonly in health or business— are associated with higher incomes and, therefore, increased potential of owning a home.
However, there are also professional fields that eschew relocation, require more home stability, and offer fewer remote options compared to others. This might explain why, despite the income gap, those with a first degree in Education are more likely to own a home compared to, say, IT professionals who don’t have to settle down due to work reasons.
In fact, Census data shows that a whopping 82% of people with a first degree in Education are likely to live in an owned home, followed by those specialized in Industry/Technology (81%) and Agriculture (80%). And, while the latter professions are likely to keep you on your feet, they don’t usually require relocation, thereby encouraging investment in a personal home. By comparison, just 67% of IT and Communication and Mass Media degree holders and 66% of Art grads live in an owned home. Notably, these particular fields are known for their dynamic nature and for producing digital nomads who may prefer to rent.
As Homeownership Drops Nationwide, Eastern States Count Most Homeowners
In the U.S., 64% of homes are owned. And, despite a 4% decrease nationwide since 2010, owned homes make up at least 60% of the residential units in 47 states (70% or more in 12 of these states).
The mid-Atlantic region showcases the two extremes in homeownership: West Virginia has the highest share of homeowners (74%), and District of Columbia has the lowest at 43%. In fact, the densely-populated East Coast is popular among homeowners, whether in tax-friendly states in the Northeast such as Maine or New Hampshire, or in the more affordable Southeastern ones like Alabama or Mississippi.
The states with the most homeowners overall are in the East and Midwest, with a few Western outliers, like Wyoming and Idaho.
- Owner and renter occupation data by education is according to Census 5 years estimates (2010 & 2020). The breakdown eliminates vacant, unoccupied units.
- Homeownership rates used are equivalent to the shares of owner-occupied homes across the United States. Census considers a housing unit as being ‘owner occupied’ “(…) if the owner or co-owner lives in the unit, even if it is mortgaged or not fully paid for. All other occupied units are classified as ‘renter occupied’, including units rented for cash rent and those occupied without payment of cash rent”.
- Education and tenure per person weight used as per ACS 5 year estimates 2019.
- For the purpose of this study, we considered educational attainment among the American population aged 25 years and older.
- Domains of activity (first degree only) were grouped as follows: Agriculture, Art, Communication & Mass Media, Education, Engineering, Finance/Business/Management, Health, Industrial/Technology, IT, Language, Legal, Marketing & E-Commerce, Political, Psychology, Public Services, Science, Social Science, and Other.
- Median income is as per ACS 5 year estimates 2020. Certain values in the text have been rounded for simplicity.
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