Parents, stop saving for your kids college. Save up for a home downpayment instead

Ryan Temmel
Feb 7
3 min read

The Traditional Path No Longer Works

For decades, the blueprint for a successful life was clear: get good grades, go to college, land a good job, and buy a house. That path worked well for previous generations. However, in 2025, things have changed. A college degree no longer guarantees a job, and for many, it leads to massive debt without a clear return on investment.

According to Statista, over 50% of young adults (ages 18–29) still live at home with their parents. Compare that to the 1960s, when only 29% of young adults lived at home. This trend has increased with every decade, and there’s no sign of it reversing soon. Why? There isn’t just one reason—several financial and economic factors are keeping young adults from becoming financially independent.

Key Factors Keeping Young Adults at Home

The Rising Cost of College
Stagnant Wages Compared to Inflation
Skyrocketing Home Prices and Cost of Living

Let’s break these down.

College No Longer Provides The

Same Return on Investment

In 2005, the average cost of in-state tuition was $5,275 per year, while the average take-home pay was $51,600. The median home price was $232,500. These numbers meant that young graduates could reasonably afford to pay off student loans while saving for a house.

Fast forward to 2024, and the numbers tell a different story:

Average in-state college tuition: $12,308 (a 133% increase)
Average take-home pay: $61,894 (only a 20% increase)
Median home price: $419,200 (an 80% increase)

While the cost of college has more than doubled, wages haven’t kept pace, and housing has become significantly more expensive. This makes homeownership nearly impossible for young adults who take on student debt. The financial burden delays major life milestones, including buying a home, starting a family, and even retiring.

A New Perspective: Rethinking College and Homeownership

If you’re a parent saving for your child’s future, it’s time to rethink traditional wisdom. College is no longer the automatic best choice for financial security, especially if your child isn’t pursuing a high-paying field like medicine, law, or software engineering.

Alternative Career Paths to Consider

Trades and Apprenticeships: Many high-paying jobs, such as electricians, plumbers, and HVAC technicians, require no college degree and offer fast-track career stability.
Entrepreneurship and Online Skills: Fields like digital marketing, coding, and freelancing allow young adults to earn high incomes without a degree.
Real Estate and Investing: Investing in real estate at a young age can build long-term wealth without the burden of student debt.

Why Parents Should Prioritize a Home Down Payment Instead

If you were planning to help fund your child’s college education, consider redirecting that savings toward a home down payment instead. Homeownership remains the #1 way to build generational wealth in America, and as housing prices continue to rise, it’s becoming harder for young adults to enter the market.

The Math: College vs. Homeownership

Let’s compare two scenarios:

Scenario A: You save $40,000 for your child’s college tuition.
Scenario B: You give them $40,000 as a down payment on a home.

In Scenario A, your child avoids student debt, but they still face high living expenses and struggle to afford a home later in life.

In Scenario B, they immediately build equity in a home, locking in a mortgage instead of paying rising rents. Over time, they can leverage their home’s value to grow wealth, something a degree alone doesn’t guarantee.

Even if a young adult graduates debt-free, affording a home today is a challenge. With average monthly mortgage payments exceeding $2,500 and a minimum $30,000–$40,000 needed for a down payment, saving for a home takes years—delaying financial stability and retirement planning.

Conclusion: The Future is Homeownership

Young adults today face unprecedented financial challenges, including soaring housing costs, stagnant wages, and diminishing returns on college education. As a parent, the best way to set your child up for financial success isn’t necessarily through a college fund—it’s through homeownership.

Instead of saving for tuition, consider saving for a down payment on their first home. It will provide them with stability, build long-term wealth, and, let’s be honest—help them move out of the house sooner!

Would you rather invest in a degree or a home for your child’s future? Share your answer below!

If you were or are a young parent, what would you save for?