Student Loan Debt and Its Impact on Home Buying

 Graduation season is upon us! It’s an exciting milestone for students and their families—a moment that celebrates years of hard work, dedication, and perseverance. Whether it’s a high school diploma, college degree, or technical certification, this achievement marks the start of a new chapter filled with opportunity. But for many recent graduates, that next step also comes with a heavy financial burden: student loan debt.

While education is often viewed as an investment in the future, the reality is that loan repayments can significantly impact other life goals—especially homeownership. In this blog, we’ll look at some statistics around student loan debt and how it affects the ability to buy a home.

According to a recent article by MortgageResearch.com, 2025 college graduates face some obstacles when it comes to buying a home. High home prices, entry-level salaries that haven’t kept pace with the cost of living, and higher balances of student loan debt, are all delaying the dream of homeownership. Repayment of student loan debt affects how much a person with a new entry-level salary can save a month for the typical 10% down payment for a home purchase. Those who did not have to take out student loans will obviously be able to save more money towards a down payment and therefore reach that amount sooner. 

Not all things are created equal though—and the state where new college graduates begin their careers can play a role in how soon they’re able to purchase their first home. A quick breakdown for our area and the corresponding years to buy information is as follows (see the link above for the full state-by-state chart): 

• Wyoming - 9.5 yrs

• South Dakota- 8.6 yrs

• North Dakota- 6.2 yrs

• Colorado- 10.7 yrs

• Montana- 12.3 yrs

**This information is based on average student loan debt balances and does not include private student loan data.

For many recent college graduates, buying a first home can feel just out of reach—especially with the added burden of student loan repayment. However, there are some loan options available that offer low or even zero down payment requirements. Additionally, gifted funds from family or others can often be used toward a down payment, but it’s important to understand the proper way to document and structure these gifts to avoid any potential financial penalties. Doing a little homework upfront can help smooth the path to homeownership

Whether you graduated from a trade school or a traditional college, you've done more than earn a certificate/diploma—you’ve built the foundation for an amazing future. Here's to chasing goals and new adventures ahead. Congrats, 2025 grads! 

¹ Source: Mortgage Research Center. "How College Graduates' Student Debt Affects Their Homebuying Timeline." MortgageResearch.com, https://www.mortgageresearch.com/articles/college-graduates-homebuying-timeline/