I think the fact that the money for college and the money for houses can't be used for other things has a huge impact on the dynamics, along with the fact that both housing and college are often purchased (partly) as display of wealth and the fact that both are oversold as investment. Which isn't to say we'd see no change in the price level, but rather that we'd mostly only see that where costs of production actually rise - otherwise, competition will still hold prices down.
How is an education purchased as a display of wealth? Education is the single most efficient way to raise your standard of living compared to that of your parents.
There is no question that much education and much housing is purchased for entirely practical reasons, and I'm not asserting otherwise. That is not incompatible with them sometimes serving as displays of wealth - a need for my children to go to the best schools, whatever the cost (of which tuition plays only a part, to be sure).
