Alabama graduates face long wait for homeownership: New study shows student loans push timeline to 2032

As the Class of 2025 prepares to celebrate graduation, a new report from the Mortgage Research Center warns that Alabama’s newest degree holders could be waiting until June 2032 to buy their first home, largely due to student loan debt and modest starting salaries.

The state-by-state analysis, released Thursday, examines how long it would take the average new college graduate to save enough for a 10% down payment. It factors in median starting salaries, average home values, and monthly student loan obligations. For Alabama, the wait stretches to more than seven years, slightly better than the national average of nine years, but still far from immediate.

“These numbers highlight how geography influences the path to homeownership for first-time buyers,” said Tim Lucas, lead analyst at MortgageResearch.com. “But it’s not just about home prices. Even in more affordable markets, it’s the weight of student loan debt that often dictates how long new grads will wait before they can buy a home.”

In Alabama, the average home price is $225,431, meaning a 10% down payment would require about $22,543. The average starting salary for 2025 graduates in the state is $60,156, according to the study, while the average student loan debt is $37,709.

After making typical monthly student loan payments — estimated around $410 nationally — Alabama graduates could save approximately $271 per month toward a down payment. At that rate, it would take just over seven years to reach the goal.

Graduates without student loans would reach the same goal by January 2028.

Nationally, the study estimates new graduates won’t be able to afford a home until April 2034, almost a full decade after finishing college. The situation is most dire in high-cost states like Hawaii, where the projected homebuying date is February 2043 — nearly 18 years after graduation. In contrast, West Virginia offers the shortest timeline, with homeownership potentially achieved by April 2030.

Even in states with relatively low home prices, like Mississippi or Arkansas, the combination of lower starting salaries and debt service can erode the advantage. In Mississippi, grads can only save $177 per month after loan payments, pushing their buying power out to October 2033.

While the report paints a challenging picture, it also outlines several options available to help graduates get there faster:

Zero-down loan programs, like USDA or VA loans, for those who qualify
Low-down payment options, such as FHA or conventional 3% down loans
Seller-paid closing costs, negotiated as part of purchase agreements
Graduation gifts, including new guideline allowances for down payment gifts from family or non-relatives

“The housing market is the toughest it’s been for first-time buyers since the 1980s,” Lucas added. “But if new grads continue their learning about the housing market and available programs, they can close the gap faster. Their next diploma will come with a set of keys.”