The population of Dallas, Texas is expected to more than double from 2020 to 2029. Skyhobo/Getty Images
The percentage of Americans paying $2,000 a month on a mortgage has jumped in two years.
In 2021 the value was 18%. In July this year, it reached 51%, data from Black Knight showed.
Nearly one in four homebuyers had payments over $3,000 in July.
The housing market remains unaffordable for many Americans, and high mortgage rates in particular represent an expensive headwind.
Data released Wednesday by mortgage data and analytics firm Black Knight shows just how expensive it is getting for many U.S. home buyers.
About 51% of home buyers face monthly mortgage payments of $2,000 or more, up from 18% just two years ago. Additionally, nearly a quarter of home buyers have payments over $3,000 – up from 5% in 2021.
“When did the $2,000 monthly mortgage payment become the norm?” Andy Walden, vice president of corporate research at Black Knight, said. “We’ve been talking about affordability for a while, but this [data] brings significant relief to the situation.”
The Federal Reserve’s 11 rate hikes since March 2022 have helped push mortgage rates to their highest levels in two decades, although home prices have not fallen as they normally would when rates rise. This makes current homeowners reluctant to move because they fear having to forego the lower interest rates they previously secured.
According to Black Knight, as of 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.
This is the highest monthly P&I payment ever and has increased by 60% in the last two years.
Meanwhile, the Case-Shiller US National Composite Home Price Index showed home prices rose for the fifth straight month in June. The value is currently just 0.02% below the all-time high from last summer.
“However, interest rates aren’t just hindering potential homebuyers,” Walden said. “While the amount of equity available for grabs has returned to near record levels, rising interest rates are having a significant impact on how – and how much – equity mortgage holders are willing to withdraw from their homes.”
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