Tuition, Debt, and Homeownership: A State-Level Panel Data Analysis of Young Adults in the United States

This study examines the relationship between the cost of higher education and homeownership rates across 51 U.S. states from 2016 to 2024 using annual panel data with 459 observations. Data were obtained from the National Center for Education Statistics Integrated Postsecondary Education Data System and the Integrated Public Use Microdata Series Current Population Survey. The model regresses state-level homeownership rates on average in-state tuition at public four-year universities, college attendance rate, and median household income. Both ordinary least squares and state fixed effects panel regressions are estimated. A Hausman test statistic of 216.53 with a p-value of 0.0000 confirms fixed effects as the preferred specification. Results show that all three variables are statistically significant predictors of homeownership. Tuition is positively associated with homeownership in both model specifications, suggesting that state economic strength confounds the direct tuition-to-debt-to-homeownership relationship. Median household income is the strongest and most consistent predictor across both models. A Random Forest regression with 500 decision trees confirms these findings as a robustness check, with feature importance scores showing college attendance rate at 42.2 percent, tuition at 37.1 percent, and median household income at 20.7 percent. The results suggest that the financial burden of higher education affects homeownership outcomes alongside broader economic conditions including income levels and state-level economic strength.