The share of Americans paying over $2,000 a month for a mortgage has nearly tripled in just 2 years (2024)

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The share of Americans paying over $2,000 a month for a mortgage has nearly tripled in just 2 years? ›

Roughly 51% of homebuyers face monthly mortgage payments of $2,000 or more, up from 18% just two years ago.

$2,000 Mortgages Are More Common Than You Might Think

After factoring in property taxes, the data reveals that it's still possible to buy a house in a little more than half the country — 28 states — with a monthly budget of $2,000.

40% of Americans Pay Off Their House — Are They Doing Better Financially? For most Americans, a home mortgage is the biggest financial obligation they will ever have. A traditional mortgage spans 30 years and is often in the hundreds of thousands of dollars, so the interest charges can be enormous.

With $2,000 per month to spend on your mortgage payment, you are likely to qualify for a home with a purchase price between $250,000 to $300,000, said Matt Ward, a real estate agent in Nashville. Ward also points out that other financial factors will impact your home purchase budget.

The additional amount will reduce the principal on your mortgage, as well as the total amount of interest you will pay, and the number of payments.

Options to pay off your mortgage faster include:

Pay extra each month. Bi-weekly payments instead of monthly payments. Making one additional monthly payment each year. Refinance with a shorter-term mortgage.

But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.

In 2022, nearly 40% of U.S. homeowners owned their homes outright, according to Census Bureau data analyzed by Bloomberg. In total, 33.3 million single-family homes and condos were mortgage-free, a 31% increase compared to 25.4 million homes a decade ago.

To determine how much you can afford using this rule, multiply your monthly gross income by 28%. For example, if you make $10,000 every month, multiply $10,000 by 0.28 to get $2,800. Using these figures, your monthly mortgage payment should be no more than $2,800.

Data from the Council for Community and Economic Research (C2ER)'s 2022 Annual Cost of Living Index shows that the national average monthly mortgage payment is $1,768. This figure differs from the median monthly payment in the U.S., which is $1,532.

Is $1500 a month too much for a mortgage? ›

The monthly income rule

“You want to make sure that your monthly mortgage is no more than 28% of your gross monthly income,” says Reyes. So if you bring home $5,000 per month (before taxes), your monthly mortgage payment should be no more than $1,400.

Monthly payments for a $250,000 mortgage

On a $250,000 fixed-rate mortgage with an annual percentage rate (APR) of 6%, you'd pay $1,498.88 per month for a 30-year term or $2,109.64 for a 15-year one. It's important to note that these estimates only include principal and interest.