A Monthly Mortgage Payment of $3,000 has Become the Standard

Date:

In today’s housing market, $3,000 monthly mortgage payments are average, despite rising interest rates and record high property prices.

According to Black Knight’s mortgage monitor report, as published by HousingWire, the average principle and interest payment among borrowers purchasing a home with a 30-year fixed-rate loan reached an all-time high of $2,306 in July. That’s before taxes and insurance (an average of $550 per month). It has increased by 60% in the last two years.

“Just two years ago, only 18% of homebuyers were facing that level of payment; as of the end of July that share had grown to 51%,” Black Knight Vice President of enterprise research Andy Walden stated.

“Beyond that, nearly one in four July homebuyers has payments north of $3,000, up from just 5% in 2021. We’ve been talking about affordability for quite some time now, but this puts the situation in stark relief,” he added.

Besides from purchase affordability, rising interest rates make it difficult for mortgage holders to get into their home equity. Mortgage holders drew $39 billion in equity in the second quarter of 2023 through cash-out refis, home equity loans, and lines of credit. It was slightly more than in the first quarter of 2023, but only half the volume of the first quarter of 2022 ($79B), when interest rates began to climb.

Mortgage holders took an average of 0.92% of available tappable equity per quarter between 2010 and 2021. Researchers discovered that this share has dropped to 0.4% in the last three quarters. Overall, it resulted in a 55% drop in equity withdrawals.

In other words, Black Knight estimates that since interest rates began to rise in early 2022, approximately $200 billion in equity that could have been taken and reinvested in the larger economy has gone untapped.

Walden emphasized that tappable equity levels remain high.

HELOC rates have grown in lockstep with Fed rate hikes, with the average HELOC offering now above 8.5% for the first time in the 15+ years Black Knight has tracked the data.


Amazing Builder Partners



Glenn Pierce
Glenn Pierce
Glenn is our New York City correspondent covering home improvement, DIYs, and home renovation reports in New England areas.

Popular

Share post:

More like this
Related

Zoom Drain Establishes a New Franchise Site in Jacksonville, Florida

Zoom Drain, a prominent provider of drain and sewer...

Inflation Remains High as Housing Costs Continue to Rise

Despite a slowing in year-over-year growth, shelter costs continue...

First Coastal Exteriors Joins Beacon

Beacon announced the completion of its acquisition of First...

Kodiak Building Partners acquires Don’s Appliances

Kodiak Building Partners, a distributor of building materials and...

East Texas Hardware Acquired by Nation’s Best

East Texas Hardware has been added to Nation's Best's...

Accoya USA sets ground on a new facility in Tennessee

Accoya USA LLC started work on its US production...

Lennar Introduces New Single-Family Houses and Models in Shearwater

Lennar, one of the nation's leading homebuilders, has recently...

D.R. Horton’s Siding is Now Supplied by James Hardie

The largest fiber cement home siding company in North...

NAHB: Majority of Single-Family Homes Built this Year were for Baby Boomers

According to the National Association of Home Builders, an...

JELD-WEN One of Newsweek’s Most Trustworthy Companies for 2023

For the second year in a row, JELD-WEN Holding,...

Colony Hardware Acquires New South Construction Supplies

Jim Sobeck, the owner of New South Construction Supply...

Lugbill Supply Center celebrates grand reopening event

On September 23, Lugbill Supply Center in Archbold, Ohio,...

Beacon Opens New Location in West Bend, Wisconsin

Beacon has launched a new branch in West Bend,...

Kodiak Building Partners acquires DHI

Kodiak Building Partners, a building materials distribution acquisition firm...

Beacon Opens Three New Greenfield Sites

Beacon has launched new locations to serve home builders...

RoyOMartin invests $9.5M to modernize manufacturing facility in Louisiana

Martco, LLC, the parent company of RoyOMartin, a third-generation,...