Home buyers are being squeezed tighter by higher mortgage rates and home prices. What are consumers in your state paying?
Higher mortgage rates and home prices are clawing away at home buyer’s budgets, with the average monthly home loan payment now at $2,317, according to a new study from LendingTree. Buyers are taking out larger mortgages to afford the costs: The average size of a LendingTree mortgage in 2022 was $333,342, the study shows. Loan sizes were highest in three areas:
- District of Columbia: $561,114
- Washington state: $537,741
- California: $520,110
While a mortgage payment is likely the biggest monthly expense homeowners incur, they face many other costs related to homeownership that they should budget for, says Jacob Channel, LendingTree’s senior economist. “Utilities and regular repair and maintenance costs are also important for people to keep on top of,” Channel says. Rising property taxes are taking a sizable chunk of household budgets as well. “With that in mind, buyers shouldn’t craft a housing budget based exclusively on their mortgage payment, as doing so might leave them with less money than they actually need to keep up with home costs.”
Where Borrowers Are Paying the Most, Least
Borrowers in every state should expect to spend at least $1,700 a month on mortgage payments, according to the LendingTree study. But in Hawaii, where mortgage payments are the highest in the country, the average is $3,696. That can chip away at household incomes. In Hawaii and California—the two states where average payments are above $3,000—households are spending 40% and 34%, respectively, of their average monthly income on housing. Most financial experts advise households not to spend more than 30% of their monthly income on housing.
The chart below shows a breakdown of monthly mortgage payments nationwide. See how your state stacks up.
Source: nar.realtor
