20% down wouldn't just mean millenials wouldn't be able to buy houses, tons of people wouldn't be able to buy houses. Which would then lead prices to fall such

20% down wouldn't just mean millenials wouldn't be able to buy houses, tons of people wouldn't be able to buy houses. Which would then lead prices to fall such that the market started to clear again. Part of the reason housing prices went up so much in the last 20 years is falling interest rates, but another is the reduction in down payment. Here is an article from 1990 that talks about conventional loans being 20% down: http://articles.latimes.com/1990-05-13/realestate/re-252_1_va-loan http://articles.latimes.com/1990-05-13/realestate/re-252_1_v... It would be similar if government backed college loans suddenly vanished. The first year colleges would have very few students enroll and they'd have to figure out how to slash tuition by 50-90% (depending on how expensive they are) and the next year when people could afford to attend without spending buying-a-house amounts of money enrollment would get back towards normal. It's not that 20% down would directly make housing more affordable, in the short run you're absolutely right that it would make it far more unaffordable. But in the long run, as the parent said, it would ground the market in rational valuations instead of crazy ones.