Although people with mortgages have had to deal with the greatest increase in absolute dollar amounts, those who own their houses have experienced a sharper increase in relation to their incomes.
Between 2020 and 2023, the average monthly expenditure for mortgage holders increased by $ 305 and reached a record $ 2,268 – an increase of 16%. For homeowners without a mortgage, the monthly costs increased by $ 180 to an average of $ 799 – an increase of 29%.
This growing burden has widened a generation division. Hypotheek loans, who are often younger and less earn, have seen their housing costs a bit, from 19.8% of family income in 2020 to 20.3% in 2023.
“Free and clear” homeowners without a mortgage, who are often older and have a fixed income, saw their home burden rising more dramatically of 9.4% to 10.5% for the same three-year period.
Williamson pointed out that the trends are disturbing, but not historically unknown.
“Mortgage holders were already faced with similar costs in 2018, and outright owners saw similar levels in 2015,” he said.
The most important engine of increased costs for mortgage holders is not surprising – rising mortgage payments.
House prices rose between 2019 and 2021, followed by a peak in mortgage interest from 2022. The result was an average monthly increase of $ 275 in mortgage payments since 2019, which could be almost $ 100,000 more during the life of the typical 30-year loan.
Downly homeowners have not been immune. Rising housing values have considerably pressed the bills of real estate tax.
“Real estate tax rose as a pandemically driven home value profits aware of $ 32 (per month) in 2022 and another $ 11 in 2023,” said Williamson. “That amounts to more than $ 500 in extra annual taxes, more than double the approximately $ 200 increase in which mortgage holders are confronted in the same period.
” Both groups, however, saw comparable rises for home insurance premiums, which have risen sharply since 2021, in particular in disaster-sensitive regions such as the southern trend that will probably continue as extreme weather and climate disaster events increase in frequency and seriousness. “
Williamson indicated that a future first American analysis will investigate the rise in ‘cost-borrower’ households who spend more than 30% of their income in accommodation to the affordability challenges.
