Images by Getty Images; Illustration by Austin Courregé/Bankrate
Collectively, Americans carry trillions in household debt, with mortgages the biggest burden by far. With home values higher than ever and the U.S. population continuing to grow, the raw total of outstanding mortgages is at record levels.
Still, a mortgage is generally considered “good” debt, and it’s the cheapest way to borrow for many Americans. For those who locked in super-low rates during the pandemic, there’s no real urgency to pay it off, either.
With mortgage rates now in the 7 percent range, however, this type of loan isn’t as attractive to some. What’s more, 49 percent of Americans agree mortgage rates will remain elevated for the foreseeable future, according to an October 2023 Bankrate survey.
Key average mortgage debt insights
Annual average mortgage debt
Mortgage debt is the heavyweight when it comes to household debt, dwarfing credit card balances, student loans and auto loans. Since 2013, mortgage debt has steadily risen. Since the pandemic, increases in home prices and interest rates kicked the climb into overdrive.
Average mortgage debt by generation
Americans generally begin taking on debt as young adults, taper off their pace of borrowing in middle age and work to pay off loans near or during retirement.
| Generation | Average mortgage debt |
|---|
| Source: Experian |
| Generation Z | $229,897 |
| Millennials | $295,689 |
| Generation X | $277,153 |
| Baby boomers | $190,441 |
| Silent Generation | $141,148 |
For each generation, this trend has taken place in tandem with mortgage rate fluctuations and home price appreciation, which has accelerated dramatically in recent years. In February 2012, the median existing-home price was $155,600, according to the National Association of Realtors. By the same time in 2017, the median was $228,200. As of November 2023, the median home price was $387,600.
States with the highest and lowest mortgage debt
These states had the highest average mortgage balance per borrower as of the end of 2022, according to Experian:
- District of Columbia – $492,745
- California – $422,909
- Hawaii – $387,277
- Washington – $331,658
- Colorado – $319,981
In these states, borrowers are much closer to paying off their home loans:
- West Virginia – $124,445
- Mississippi – $139,046
- Ohio – $139,618
- Indiana – $141,238
- Kentucky – $144,222
How mortgage debt compares to other household debt
Mortgage debt makes up the largest portion of household debt, but because the payments are often spread out over decades, they don’t have as outsized an impact on a household’s monthly budget — especially when compared to higher-interest debt like credit card balances.
Here are stats related to other common types of debt, according to the Federal Reserve Bank of New York:
- Auto loans: Total auto loan debt came to $1.6 trillion as of Q3 2023, an increase of $13 billion from the previous quarter.
- Credit card debt: Total credit card debt came to $1.08 trillion as of Q3 2023, an increase of $48 billion from the previous quarter.
- Student loans: Total student loan debt came to $1.6 trillion as of Q3 2023, an increase of $30 billion from the previous quarter.
That longevity works to borrowers’ advantage in another way: Each monthly payment you make builds your home equity, which can be leveraged over time to help further your financial goals.
Additional reporting by Agnes Gaddis
FAQs
At the beginning of 2024, the average mortgage debt owed per household was more than $241,000, according to Bankrate, which is a 4% increase from two years ago. With the current 30-year fixed rate mortgage at 6.87%, getting a loan may not seem so attractive.
How much mortgage debt is normal? ›
How much mortgage debt does the average American have? The average mortgage debt among Americans is $244,498, per Experian's 2023 State of Credit Report. That's up from the average mortgage debt reported by Experian in 2022: $232,545.
Will mortgage rates drop in 2024? ›
In its May housing forecast, the government-sponsored mortgage-financing enterprise set expectations for the 30-year mortgage rate to fall to 7% by the fourth quarter of 2024. It also expects rates to drop below 7% in 2025, starting in the first quarter, and to finish the year at 6.6%.
What is the 28 36 rule? ›
According to the 28/36 rule, you should spend no more than 28% of your gross monthly income on housing and no more than 36% on all debts. Housing costs can include: Your monthly mortgage payment. Homeowners Insurance. Private mortgage insurance.
What is the average American mortgage payment? ›
How much is the average mortgage monthly payment? According to the 2023 Annual Cost of Living Index from C2ER, the national average monthly mortgage payment – excluding property taxes and insurance – is $2,390. What's included in my monthly mortgage payment?
What is the debt in 2024? ›
Debt held by the public is projected to grow to $25,910 billion (98.4 percent of GDP) at the end of 2023 and $27,783 billion (102.0 percent of GDP) at the end of 2024. After 2024, debt held by the public as a percent of GDP is projected to gradually increase, reach- ing 109.8 percent in 2033.
What is the average age people pay off their mortgage? ›
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
How many Americans are living paycheck to paycheck? ›
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year. In other words, more than three-quarters of Americans struggle to save or invest after paying for their monthly expenses.
What is the average credit score in the US? ›
What is the average credit score? The average FICO credit score in the US is 717, according to the latest FICO data. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
Will 2024 be a better time to buy a house? ›
Mortgage rates are expected to come down in 2024, and inventory and home sales are likely to increase. Homebuyers and sellers can also expect prices to continue to rise, albeit at a slower clip than the past couple of years.
Prediction of Mortgage Rates for 2025
Keep in mind that inflation is still a factor, and mortgage rates may continue to hover around 6%. Here are some predictions for 2025 from key players and industry associations in the mortgage space: Fannie Mae: 6.1% Mortgage Bankers Association: 5.9%
What credit score is needed for a conventional loan? ›
In most cases, you'll need a credit score of at least 620 to qualify for a conventional loan.
How much house can I afford if I make $70,000 a year? ›
The home price you can afford depends on your specific financial situation—your down payment, existing debts, and mortgage rate all play a role. Most experts recommend spending 25% to 36% of your gross monthly income on housing. For a $70,000 salary, that's a mortgage payment between roughly $1,450 and $2,100.
How much money do you have to make to afford a $300 000 house? ›
How much do I need to make to buy a $300K house? You'll likely need to make about $75,000 a year to buy a $300K house. This is an estimate, but, as a rule of thumb, with a 3 percent down payment on a conventional 30-year mortgage at 7 percent, your monthly mortgage payment will be around $2,250.
How much is a monthly payment on a $100,000 house? ›
Monthly payments for a $100,000 mortgage
| Annual Percentage Rate (APR) | Monthly payment (15-year) | Monthly payment (30-year) |
|---|
| 6.75% | $884.91 | $648.60 |
| 7.00% | $898.83 | $665.30 |
| 7.25% | $912.86 | $682.18 |
| 7.50% | $927.01 | $699.21 |
5 more rowsThe average 30-year fixed mortgage rate as of Friday is 6.91%. By the final quarter of 2025, Fannie Mae expects that to slide to 6.0%. While Wells Faro's model expects 5.8%, and the Mortgage Bankers Association estimates 5.5%.
What is the current mortgage debt in the US? ›
Center for Microeconomic Data
Nearly 9 percent of credit card balances and 8 percent of auto loans (annualized) transitioned into delinquency. Mortgage balances shown on consumer credit reports increased by $190 billion during the first quarter of 2024 and stood at $12.44 trillion at the end of March.
What is the average mortgage rate over the years? ›
Historical Mortgage Rates by Decade
| Minimum Mortgage Rate | Median Mortgage Rate |
|---|
| 1990-1999 | 6.49% | 7.88% |
| 2000-2009 | 4.71% | 6.18% |
| 2010-2019 | 3.31% | 4.03% |
| 2020-Present | 2.65% | 3.51% |
2 more rowsNov 22, 2023
The 28%/36% rule is a heuristic used to calculate the amount of housing debt one should assume. According to this rule, a maximum of 28% of one's gross monthly income should be spent on housing expenses and no more than 36% on total debt service (including housing and other debt such as car loans and credit cards).
