The average mortgage balance in America grew to $244,498 in 2023, an $8,000 increase from 2022.
Throughout the decade thus far, the U. S. shortages have characterized the economy, impacting almost everything that customers could possibly purchase. From personal shelter to Grape Nuts cereal, shoppers had to make concessions or find alternatives until supplies were replenished.
Most of those shortages are behind us now. Even our nations car dealer lots now have a healthy inventory for would-be drivers to choose from. However, one item remains in short supply: housing.
In our analysis of Experians consumer credit and debt trends for 2023, we look at some things to be aware of as the supply and demand for homes start to slowly increase once again.
A Deep Dive into the Numbers
Owning a home is a significant financial milestone for many Americans. However, it also comes with the responsibility of managing mortgage debt. With rising home prices and interest rates, it’s essential to understand the current landscape of mortgage debt in the U.S.
Key Insights:
- The average mortgage debt balance per household reached $241,815 in Q2 2023, marking a 4% increase from the previous year.
- In 26 U.S. cities, the average mortgage balance surpasses $1 million, with 18 of those cities located in California.
- Total mortgage debt reached a staggering $12.14 trillion in Q3 2023, reflecting a $126 billion increase from the previous quarter.
- The average HELOC balance per household stood at $41,838 in Q2 2023, representing a 4.2% increase compared to 2022.
- Total HELOC debt amounted to $349 billion in Q3 2023, indicating a $9 billion increase from the preceding quarter.
- As of Q3 2023, total mortgage originations reached $386 billion.
- The average credit score for borrowers seeking purchase loans was 733 in November 2023.
- The average 30-year mortgage rate climbed to 7.54% in Q4 2023.
- The total mortgage debt service ratio in the U.S. is projected to increase to 4.5% of household disposable income by 2025, compared to 4% in 2022.
Breaking Down the Numbers:
Average Mortgage Debt by Generation:
- Generation Z: $229,897
- Millennials: $295,689
- Generation X: $277,153
- Baby Boomers: $190,441
- Silent Generation: $141,148
States with the Highest and Lowest Average Mortgage Debt:
Highest:
- District of Columbia – $492,745
- California – $422,909
- Hawaii – $387,277
- Washington – $331,658
- Colorado – $319,981
Lowest:
- West Virginia – $124,445
- Mississippi – $139,046
- Ohio – $139,618
- Indiana – $141,238
- Kentucky – $144,222
Mortgage Debt Compared to Other Household Debt:
- Auto Loans: Total auto loan debt reached $1.6 trillion in Q3 2023, reflecting a $13 billion increase from the previous quarter.
- Credit Card Debt: Total credit card debt amounted to $1.08 trillion in Q3 2023, indicating a $48 billion increase from the preceding quarter.
- Student Loans: Total student loan debt reached $1.6 trillion in Q3 2023, reflecting a $30 billion increase from the previous quarter.
Understanding the Implications:
The significant rise in mortgage debt highlights the growing financial burden on American households. While mortgage debt is considered “good” debt due to its lower interest rates and long-term repayment plan, it’s crucial to manage it responsibly.
Strategies for Managing Mortgage Debt:
- Make timely payments: Consistent on-time payments are essential for maintaining a good credit score and avoiding late fees and penalties.
- Consider refinancing: If interest rates have dropped since you obtained your mortgage, refinancing could lower your monthly payments and save you money in the long run.
- Explore additional payment options: Making bi-weekly payments instead of monthly payments can reduce the overall interest paid over the life of the loan.
- Increase your down payment: A larger down payment can lower your monthly payments and reduce the total amount of interest paid.
- Live within your means: Avoid overspending and create a budget that allows you to comfortably manage your mortgage payments alongside other financial obligations.
Understanding the current landscape of mortgage debt is crucial for homeowners and potential homebuyers. By analyzing the key insights and implementing responsible management strategies, individuals can effectively navigate their mortgage journey and achieve their financial goals.
Change in Mortgage Inquiries, 2022-2023
The average mortgage debt increased to $244,498 in 2023, a slower rate of increase than in previous years despite the low volume of home sales and mortgages. The slowing was reflective of other factors observed in the housing market. Home prices nationwide only increased by 5. 5% annually through Q3 2023, according to the FHFA, down from the 12% increase from 2021 to 2022. Additionally, because there were an equal number of paid-off mortgages in 2023 to offset the few new mortgages created, the total number of mortgages—both existing and new—remained essentially unchanged from 2022.
Average FICO® Score of Mortgage Borrowers
Demographics of homeowners skew older than the population at large. Furthermore, although a consumer’s age has no direct bearing on their credit scores, their payment history and credit history do Furthermore, obtaining a mortgage can enhance a person’s credit mix, which may raise a borrower’s FICO® Score.
Animated Map Shows Average Mortgage Debt In Every State
FAQ
What is the average loan debt in the US?
How much debt does the average American have without a mortgage?
What is the average American debt per person?
What is the average credit card debt in America?
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Generation
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Average Credit Card Debt
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Millennials
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$6,521
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Generation X
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$9,123
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Baby boomers
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$6,642
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Silent generation
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$3,412
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How much mortgage debt do Americans have?
Americans with a mortgage pay a median monthly payment of $1,595. 34 Accounting for 70% of all American debt, mortgage debt carries the highest total at $10.44 trillion. 35 Forty-two percent of households have mortgages. (That’s over 51.5 million total American households). And the average mortgage debt in our country is $202,454. 36,37,38
What is the average debt in America?
The average debt in America is $104,215 across mortgages, auto loans, student loans, and credit cards. Debt peaks between ages 40 and 49 among consumers with excellent credit scores. Washington has the highest average debt at $180,462, and West Virginia has the lowest at $64,320.
What is the average mortgage debt per borrower?
Average mortgage debt per borrower, according to TransUnion, stood at $258,167 in the fourth quarter of 2023. The total number of mortgage accounts is up to 52.9 million—an increase from the 52.6 million accounts reported in Q4 2022. Where Are Mortgage Rates Going?
What is the average mortgage debt per household in 2023?
The average mortgage debt balance per household was $241,815 as of Q2 2023, a 4 percent increase from 2022. The average mortgage balance exceeds $1 million in 26 U.S. cities, including 18 cities in California. Total mortgage debt came to $12.14 trillion as of Q3 2023, an increase of $126 billion over the previous quarter.