Pew Links Housing Wealth to College Gains

The impact of today’s tough housing market will be felt in the years ahead as fewer children from middle-class households get on the ladder of economic success by going to college. That’s because for many middle-class households, the ability of their children to go to college, or go to a better college than they otherwise would, is directly linked to the wealth accrued in their home.

That’s the conclusion of a study just released by the Pew Charitable Trusts in which Cornell University researcher Michael Lovenheim looks at data from the 2001-2005 housing boom and finds a direct correlation between higher-education attainment and housing wealth for middle-class families.

“Higher education decisions are highly sensitive to fluctuations in family resources,” says the report, called Housing Wealth and Higher Education: Building a Foundation for Economic Mobility. “The model shows that low- and middle-income students whose families experienced increases in housing wealth just before reaching college age were more likely to attend college, more likely to attend higher-quality universities, and more likely to graduate.”

Unfortunately, there’s a negative flip side to that: “The recent housing bust and resulting decrease in wealth could negatively impact the post-secondary decisions of low- and middle-income families.”

Among the findings:

  • For every $10,000 of home equity gains, the likelihood of enrolling in college increases by 6 percentage points among families with incomes below $70,000.
  • The wealth generated by rising home values is estimated to increase college enrollment by 24 percent among low- and middle-income families.
  • Increased housing wealth raises the likelihood of college graduation by 9 percent, lifting it to 32 percent.

Access the full report.

Access NAR’s own research on the wealth effect of home ownership.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. MPW

    What a very interesting set of statistics. . . I hadn’t really thought about how lower housing prices would effect middle and low socioeconomic teens and their college futures. And, for that matter, how rising house prices can increase college enrollment. Thanks for writing.

  2. That is an interesting article, however, any student with good grades can still get college loans in the USA. Home values declining will “not” prevent excellent and ambitious students from attending college!

  3. People have been praying for a bublbe in Canada for the past 5 or so years. Today the prices are now well beyond their reach. They had the money but were betting for a bublbe and lost that bet along with any hope for home ownership. Those that bet the market would heat up have $100 s of thousands of dollars in their bank accounts. My mom had no savings but all her money went to her home. Today she owns a house outright with over $1,000,000 in her account.