Dorm or Deed: New Study Finds Buying a Home Cheaper Than Paying Room and Board in 1 in 5 College Towns

A Mortgage Research Network analysis of 121 colleges reveals where parents could save thousands on living costs by buying a home 

• Nationwide, buying a home for your college student is cheaper than room and board in 23 of 121 markets with major colleges or universities
• Parents of students at Temple University, Marshall University and the University of Delaware can come out as much as $30,000 ahead over three years
• For those who choose to own for a decade profits can be as high as $70,000

COLUMBIA, Mo., Aug. 14, 2025 /PRNewswire/ -- As college freshmen settle into dorm life, a new analysis from Mortgage Research Network released today finds that at nearly one in five U.S. colleges, buying a home and owning it for as little as three years may be the more affordable option. Of 121 colleges analyzed nationwide, 23 are in towns where homeownership costs less than dorms or off-campus rentals over a three-year period. Buying outweighs renting or dorm life in 26 towns for those comfortable holding the home as a rental property for 10 years.

To determine where buying is cheaper, Mortgage Research Network compared the typical three-year cost of college room and board to the cost of buying and owning a house or condo near campus. This calculation included mortgage payments, property taxes, insurance and food. The analysis assumed a 10% down payment, modest home appreciation and used room and board as a proxy for off-campus rent, which tends to be similar in most markets. It also factored in two roommates during the student's stay, covering two-thirds of the median market rent.

"Buying a house for your college student won't work everywhere, but in the right market, it can be a smart financial decision with real returns, especially for families thinking about longer-term ownership," said Tim Lucas, the report's author and lead analyst at Mortgage Research Network.

The biggest potential savings were found at Temple University (Philadelphia), Marshall University (Huntington, W.Va.), University of Delaware (Newark, Del.) and the University of Alabama (Tuscaloosa), where parents could save $16,000 to nearly $30,000 over three years by owning instead of paying for dorms. Other top schools where buying is more affordable include University of Memphis (Memphis); Louisiana State University (Baton Rouge, La.); University at Buffalo (Buffalo, N.Y.); University of South Carolina (Columbia, S.C.); Kent State University (Kent, Ohio) and Rowan University (Glassboro, N.J.).

The markets to purchase a home were found in cities with low home prices, low property taxes and high rents compared to mortgage payments. Of the 23 schools, the average home price was $255,000 with a $226 average monthly tax bill and $1,648 in average rent.

In general, areas with lower investment outcomes during the first three years tend to stay owner-unfriendly longer term. At the University of Illinois (Champaign, Ill.), owning the home saves money during the first three years, but becomes unprofitable at about year five, due to the area's high tax rate and mediocre rent prices.

Room and board often costs more than tuition

Parents of college-bound students often assume tuition will be the biggest expense. However, according to the National Center for Education Statistics, students at four-year, in-state public universities paid an average of $9,834 in tuition during the 2022–23 school year, the most recent data available. In contrast, on-campus room and board cost $12,302, making housing and food the most significant financial burden.

Living off campus isn't necessarily a cheaper alternative. NCES data shows that students who rent off campus and don't live with family save only about $300 per year, a modest reduction that doesn't substantially offset overall costs.

How To Make College Homebuying Pencil Out

Making a college home purchase work financially comes down to choosing the right market and loan structure. Lucas offered these tips when considering buying in a college town:

• Focus on schools where room and board costs are high, but home prices are relatively low.
• Watch out for high property taxes and insurance rates, which can erode savings. In Champaign, Ill., home of the University of Illinois, a $576 monthly tax and insurance bill makes homeownership unprofitable after three years.
• Research local appreciation trends and avoid areas where values are stagnant or declining.

"Perhaps most importantly, make your child the primary borrower on the mortgage, with a parent listed as a non-occupant co-borrower," he said. "This structure allows families to qualify for favorable owner-occupied mortgage rates, even if the parent is supplying most of the income or down payment. Buying the home as an investment property, by contrast, typically results in higher interest rates and stricter loan requirements."

23 Best Schools To Buy a House For Your College Student 

To view the full report, including a list of all 121 schools analyzed, 10 year-end projections and interactive tools, please visit: https://www.mortgageresearch.com/articles/dorm-or-deed-homebuying-cheaper-than-room-and-board/

About Mortgage Research Network
Based in Columbia, Missouri, MortgageResearch.com provides real estate advice, research and news to help homebuyers navigate the mortgage landscape. With a focus on simplifying decisions around homeownership, the site delivers in-depth analyses and reports on market trends, lending practices and homebuying tips.

SOURCE Mortgage Research Network