This is the average mortgage for 30-somethings. How do you compare?
Mortgage debt has increased significantly over the past two years.
- According to a 2021 report from Experian, millennials have the second highest average mortgage debt of any generation.
- However, if you are buying a new home now, your mortgage will likely be much higher than average.
It’s no big secret that house prices have soared in recent years. In fact, Zillow reports that the median home value in the United States rose 20.7% over the past year to $349,816, an all-time high.
As expected, mortgage debt also increased. We recently looked at the average American’s indebtedness, according to Experian, broken down by type of debt as well as by generation. Here’s a look at what the average 30-something owes on their mortgage.
The average mortgage debt of 30-somethings
The Experian State of Credit Report 2021 breaks down outstanding mortgage debt by generation, so let’s cover the numbers for millennials. Admittedly, millennials (also called Generation Y) are generally considered to be those born between 1981 and 1996 (26-42 years old), so it is not just people in their thirties. But it’s fair to say that millennials are likely to make up the bulk of first-time home buyers.
In 2021, the average millennial with a mortgage owed $255,527 in mortgage debt, according to the Experian report. This represents an increase of 10% compared to the 2020 average and 16% compared to 2019 levels. Given the rise in house prices, as well as the sharp increase in refinancings (including refinancings with withdrawal ) due to low mortgage rates throughout 2021, that certainly makes sense.
The average millennial owes 11% more on their mortgage than the average American homeowner, and has the second highest mortgage debt, just behind Gen X. That also makes sense: baby boomers and silent generations have been in their homes. longer on average, and therefore had more time to repay their loans. And while Millennials are in their prime shopping years, Gen Xers (ages 42-57) are in the “upscaling” years, needing more space and amenities for their family. .
Caveats to consider
There are a few caveats that make these numbers lower than what you’re likely to pay on a new mortgage today. On the one hand, they include people in these age groups who have owned their home for several years. This means they bought when the median home price was significantly lower than it is today. It also means that homeowners included in these groups have had some time to pay off their principal balance (the original amount they borrowed).
For New borrowers, the average mortgage is much higher. In fact, the average purchase loan at the end of June 2022 was $413,500, according to the Mortgage Bankers Association.
It’s not just about your mortgage debt
Another important thing to mention is that mortgage rates have skyrocketed, making home ownership more expensive for people who need to borrow money (i.e. most thirtysomethings). In fact, the average 30-year fixed rate mortgage interest rate has nearly doubled so far in 2022 alone. As a result, borrowers can expect a monthly payment of principal and interest about 42% higher than at the start of the year for the exactly the same Amount of the loan.
If you’re interested in buying a home, our guide to the price of a house you can afford can help you start to hit the numbers and learn more about the process. And our mortgage calculator can also help you figure out what interest rate and other details will work for you.
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