Santa Barbara leads the nation’s priciest college towns, with home prices nearing $2 million
Santa Barbara, California, is now the most expensive college town in the US, with a median home price close to $2 million—over twice as high as the next city on the list, according to a new Redfin report. Both Santa Barbara and Boca Raton, Florida, which came in second, are beach towns—a factor driving their high prices.
Redfin’s analysis of the 50 biggest college towns showed Santa Barbara’s median home price reached $1,964,170, up 4% from last year. Boca Raton, home to Florida Atlantic University, followed at $822,701, a 9.3% jump. Flagstaff, Arizona, where Northern Arizona University is located, ranked third at just under $700,000, with prices pushed up by demand for outdoor living and its location near the Grand Canyon.
“Home prices—and, by extension, rent—in some college towns have climbed so high they’re increasingly out of reach for students, faculty and staff,” said Redfin Chief Economist Daryl Fairweather.
“In a place like Santa Barbara or Flagstaff, high housing costs may push faculty and staff to live far from campus, and it also deters some professors from teaching there altogether. For students, high costs may mean they have to take on more debt and/or live far from campus.”
New US Census Bureau data showed that monthly mortgage payments rose to $2,035 from $1,960. The highest payments were in California ($3,001), Hawaii ($2,937), New Jersey ($2,797), Massachusetts ($2,755), and Washington, D.C. ($3,181).
Renters also paid more, with median rent plus utilities increasing from $1,448 to $1,487. Renters still spent about 31% of their income on housing, but affordability stayed tight. Because of these challenges, homeownership for Americans under 35 fell to 36.4% in Q2 2025—the lowest among all age groups.
Similarly, according to Realtor.com's August 2025 Buying Power Report, only 28% of homes for sale are affordable for the median-income earner, a significant decline from 55.7% in 2019.
Rising prices, shifting strategies
The Redfin report showed that rising costs are making both students and university employees rethink where they can afford to live. “The best ways to make housing more affordable is to build more homes, update zoning laws to allow more multi-family housing, and invest more in student housing,” Fairweather said. She added that while some local homeowners may resist these changes, non-owners would likely welcome reforms that improve affordability.
In Utah, more parents are buying homes for their kids who are going to college. “A lot of investors in Utah are parents buying homes for their kids in college at BYU or the University of Utah,” said Sam Brinton, a Redfin Premier agent in Salt Lake City.
“In Provo, many of the purchases within a mile of BYU are parents buying for their kids, and potentially for their kid’s friends, who will pay rent. They figure, why pay rent for four years when they can own a home and hopefully sell it later at a higher price?”
Meanwhile, a possible Fed rate cut in September could help US homebuyers save an average of $20,569 over 30 years if mortgage rates fall from 6.29% to 6.00%, according to a study by HomeAbroad and Ziffy.ai. Lower rates would also reduce the annual income needed to qualify for a mortgage by about $2,448, with even greater savings in expensive areas. This could make it easier for middle-income buyers, such as teachers and first responders, to purchase homes in markets that were previously too costly.
Affordability remains in the Rust Belt
Coastal and mountain college towns are the most expensive, but the Rust Belt is much cheaper. Dayton, Ohio, is the most affordable college town in the country, with a median home price of just $137,261. Syracuse, New York, and Mount Pleasant, Michigan, are also among the least expensive, with prices below $202,000.
Rising home prices in college towns highlight bigger affordability problems across the US housing market. With costs climbing, more people are turning to mortgage professionals for creative loan options and pushing for policy changes. Jeff Brown, founder and CEO of T2 Capital Management, said it’s important for investors and brokers to assess each school before moving forward.
“The real estate construction space has not abated on the cost side of the equation, and so any new student housing properties that are being developed right now are being delivered at a cost in which to make the numbers make sense. As a for-profit developer, you're generally having to deliver at top-of-market sort of rents," Brown told Mortgage Professional America.
“For us to be off campus and to be able to buy properties in the secondary market that offer a much lower cost alternative to students at that given university is a really appealing investment. It’s worked out extraordinarily well for the past several years.”
