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National Average Monthly Mortgage Payment

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Housing is one of Americans’ biggest expenses. In fact, Americans now owe $14 trillion in mortgage debt. That sounds like a mountain of debt, but what does that figure really mean for average families?

LendingTree analyzed data from the 2016 U.S. Census Bureau’s American Community Survey to figure out the average monthly mortgage payment on a national and state-by-state level. We also analyzed the affordability of these payments based on mortgage costs relative to homeowners’ incomes.

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What is the average monthly mortgage payment in the US?

The average monthly mortgage payment in the United States is $1029*.

This payment eats up 14.84% of the typical homeowners’ monthly income. That may seem low, but we are looking at homeowners specifically — and homeowners tend to have much higher incomes than the general population, as we note later in this piece. When you add in other housing costs such as property taxes, association dues, utilities and maintenance costs, the median cost of housing jumps to $1,491 for homeowners with a mortgage.

On average, first-time homebuyers face higher monthly payments than the national average. According to research from the Urban Institute, in early 2018, first-time homebuyers bought houses worth $245,320 with an average down payment of $22,561, and an interest rate of 4.43%. Given these figures, first-time borrowers faced a mortgage payment of $1,235 — 21% more than the average homeowner.

Of course, a homeowner’s actual mortgage costs depend on a variety of factors, including when a homeowner purchased a home, where the home is located and the terms of the loan. Additionally, the affordability of a monthly mortgage payment depends the cost of the mortgage relative to a homeowner’s income.

States with the highest average mortgage payment

One of the biggest factors driving differences in monthly mortgage payments across states is the difference in housing prices. In general, homeowners in the Northeast and on the West coast pay more for their houses than homeowners anywhere else in the United States. In some cases, higher than average incomes somewhat compensate for these higher than average mortgage payments. However, buying a home in these more expensive states may be a financial stretch, even for people with high incomes.

These are the 10 states with the highest average mortgage payment.

Highest Average Mortgage Payment
State Monthly Mortgage Payment* Mortgage payment as a percentage of income
Washington DC $1,784.00 15.47%
Hawaii $1,747.00 19.82%
California $1,642.00 19.06%
New Jersey $1,355.00 14.28%
Massachusetts $1,333.00 14.50%
Maryland $1,326.00 15.21%
New York $1,317.00 15.06%
Alaska $1,304.00 15.43%
Virginia $1,243.00 15.65%
Washington $1,196.00 15.58%

*Except where otherwise specified, the monthly mortgage payment refers to the calculated average monthly mortgage payment using the methodology outlined above.

States with the lowest average mortgage payment

Compared with coastal dwellers, homeowners in the Midwest and the South have far lower monthly mortgage costs. Not only are monthly mortgage payments lower, Midwesterners tend to use up a smaller percentage of their income on their mortgages. These are the states with the lowest average monthly mortgage payments.

Lowest Average Mortgage Payment
State Monthly Mortgage Payment* Mortgage payment as a percentage of income
West Virginia $690.00 12.73%
Arkansas $692.00 12.79%
Indiana $693.00 11.85%
Iowa $739.00 11.65%
Mississippi $752.00 13.84%
Michigan $753.00 12.02%
Ohio $764.00 12.24%
Kentucky $765.00 11.02%
South Dakota $786.00 12.31%
Alabama $794.00 13.55%

*Except where otherwise specified, the monthly mortgage payment refers to the calculated average monthly mortgage payment using the methodology outlined above.

Average monthly mortgage payment affordability

On average, homeowners earn far more than the median household in the United States. The median homeowners with a mortgage earns $83,219  annually, compared with the national median income of $59,039. Plus, many homeowners also have the advantage of having locked in a monthly mortgage payment years ago. That means that homeowners with a mortgage put a mere 15% of their household income toward their monthly mortgage payment.

Of course, not all homeowners can so easily afford their monthly mortgage payment. New homeowners in particular face more challenging borrowing conditions. For example, current renters may have lower incomes and lower credit scores than current homeowners. Combining that with rising mortgage interest rates and rising home prices makes homeownership seem out of reach for many.

However, housing affordability analysis from the Urban Institute shows that renters who earn the median income put an average of 28% of their income toward their monthly rental payment. By contrast, buying a median-priced home with a 3.5% down payment would mean that current renters could cut their monthly payments (including taxes and insurance) down to 25.3% of their income. This doesn’t mean homebuying makes sense for all current renters. Nationally, more than two-thirds of all renters earn $60,000 or below per year. Unless most current renters live in areas with lower than average home prices, monthly mortgage payments may prove to be too expensive.

The percentage of income that homeowners put toward their mortgage payment varies radically by state. In Kentucky, homeowners put an average of 11% of their income toward the monthly mortgage. Hawaiian homeowners put nearly 20% of their income towards their monthly mortgage.

On average, homeowners in states with higher average mortgage payments tend to put a greater percentage of their income toward mortgage payments. Likewise, homeowners in states with lower mortgage payments tend to put a smaller percentage of their income toward mortgage payments. But that relationship doesn’t always hold. For example, Mississippi had the fifth lowest monthly mortgage payment ($752), but it ranks 25th in mortgage affordability with nearly 14% of income going toward the mortgage.

These are the states with the highest and lowest percentage of income going towards mortgage payments.

States with the lowest percentage of income going toward mortgage payments

Lowest Income to Mortgage Payment Ratio
State Monthly Mortgage Payment* Mortgage payment as a percentage of income
Kentucky $765.00 11.02%
Iowa $739.00 11.65%
Indiana $693.00 11.85%
Nebraska $803.00 11.95%
Michigan $753.00 12.02%
Ohio $764.00 12.24%
Kansas $799.00 12.26%
South Dakota $786.00 12.31%
North Dakota $897.00 12.39%
Wisconsin $831.00 12.58%

*Except where otherwise specified, the monthly mortgage payment refers to the calculated average monthly mortgage payment using the methodology outlined above.

States with the highest percentage of income going toward mortgage payments

Highest Income to Mortgage Payment Ratio
State Monthly Mortgage Payment* Mortgage payment as a percentage of income
Hawaii $1,747.00 19.82%
California $1,642.00 19.06%
Nevada $1,000.00 15.99%
Montana $928.00 15.66%
Oregon $1,084.00 15.65%
Virginia $1,243.00 15.65%
New Mexico $871.00 15.62%
Washington $1,196.00 15.58%
Colorado $1,160.00 15.54%
Florida $936.00 15.53%

*Except where otherwise specified, the monthly mortgage payment refers to the calculated average monthly mortgage payment using the methodology outlined above.

How does your mortgage stack up?

Whether you’re a long-time homeowner, or someone looking to buy your first home, knowing the average monthly mortgage payment can help you put your next home purchase in context. However, knowing the average monthly mortgage payment isn’t nearly as important as knowing how much you can afford. Before buying your next house, use a home affordability calculator to decide how much you can afford to put towards your monthly mortgage payment.

Methodology: LendingTree data from used the U.S. Census Bureau’s Population Estimates Program to estimate monthly mortgage payments. The Census Bureau’s data estimates were based on the 2016 American Community Survey Data.

To estimate monthly mortgage costs, we subtracted median selected housing costs from houses without a mortgage from median selected housing costs from houses with a mortgage.

Estimates of monthly income are based on the median monthly income of homeowners with mortgages in each state. Monthly mortgage payments as a percentage of income is calculated as the estimated monthly mortgage costs (outlined above) divided by the median monthly income of homeowners with mortgages in each state.

 

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