What is the average mortgage payment in the US in 2023?

Mortgage rates hit their highest level in over three decades this year, sending the average payment for these loans soaring. The median price of a home sold in the US in the first half of 2023 was $423,750, and the average 30-year-fixed-rate mortgage was 6.8 percent.

The Federal Reserve reported that in 2022, the median mortgage payment was $1,400, with homeowners in the West ($1,700) paying more than those in the Northeast ($1,500), South ($1,300), and Midwest ($1,195).

The rapid rise in the cost of a mortgage in the US

To calculate the average cost of a mortgage, we can look at the median and average prices of homes sold in the US over the past 30 years. We then multiply this figure by the average down payment, which is 6% for first-time homebuyers and 17% for those who have purchased a home before. This gives us the total amount borrowed. We then add the average interest rate for each year to calculate the amount paid to the bank. This total amount can be divided by 30 to get the annual payment and then by twelve to get the monthly payment. It’s important to note that this estimate does not include the cost of insurance or taxes so the actual payment may be higher.

However, by analyzing the figures over the past three decades, we can see that the value of mortgages has increased significantly. For instance, in 1993, the average mortgage price for a first-time homebuyer was $413, or $364 for those who had purchased a home before. In 2023, these figures were $1,405 and $1,241, respectively.