American Mortgage Payments Are 36% Higher Than a Year Ago
March 14, 2022
Amid surging home prices and higher mortgage rates, Americans are paying more for their mortgages than ever before.
The average payment for a 30-year, fixed-rate mortgage is now $1,230 per month, according to home-listing site Zillow. That is an increase of 36% from a year ago when the average monthly payment was $905, and a 6% increase from January.
In the past year, the average single-family home price increased nearly 20%, from about $272,000 to $326,000. These higher prices, coupled with climbing interest rates, have driven mortgage payments to an all-time high. Despite slight declines in recent weeks, mortgage rates are expected to continue their climb as the Federal Reserve raises rates to combat inflation.
The one-two punch of higher home prices and more expensive lending may be leaving some prospective buyers discouraged. Home-loan applications have fallen to the lowest level since 2019, and sales of new single-family homes have declined for the last three months. Shrinking demand may help cool the housing market, but most analysts expect robust sales to continue.