The population of Dallas, Texas is expected to more than double from 2020 to 2029. Skyhobo/Getty Images
The percentage of Americans paying more than $2,000 a month for a home mortgage has skyrocketed in two years.
In 2021, this figure was 18%. Black Knight data showed that this July it reached 51%.
Nearly one in four home buyers paid more than $3,000 in July.
The housing market remains unaffordable for many Americans, and high mortgage rates in particular present an expensive headwind.
Data released Wednesday by mortgage data and analytics firm Black Knight shows just how expensive it is getting for many American home buyers.
Roughly 51% of home buyers face monthly mortgage payments of $2,000 or more, up from 18% just two years ago. Not only that, but nearly a quarter of home buyers have a down payment of more than $3,000 – up more than 5% in 2021.
“When did a monthly mortgage payment of $2,000 become the norm?” said Andy Walden, vice president of Black Knight Enterprise Research. “We’ve been talking about affordability for a long time, but this [data] Brings a lot of relief to the situation.”
The Federal Reserve’s 11 interest rate hikes since March 2022 have helped propel mortgage rates to a two-decade high, although home prices have not fallen as they typically do when rates rise. As a result, current homeowners are reluctant to move for fear of giving up the low rates they previously enjoyed.
In July 2023, the average monthly principal and interest payment for borrowers with a 30-year fixed loan was $2,306, before additional taxes and insurance costs, according to Black Knight.
This is the highest monthly P&I payout on record, and has increased 60% over the past two years.
Meanwhile, the Case-Shiller US National Composite Home Price Index showed that home prices rose for the fifth month in a row in June. This measurement is currently only 0.02% below the all-time high hit last summer.
“The rates aren’t the only ones affecting potential home buyers,” Walden said. “While tappable equity levels have returned to nearly record highs, rising rates are having a clear impact on how — and how much — equity mortgage holders are willing to take out of their homes.”
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