Typical Mortgage Payment Is Up $1,339 From 10 Years Ago

If you’re buying a typical house now, you’re looking at a monthly mortgage payment that’s $1,339 higher than the average payment for a typical house 10 years ago, showing one reason why so many current homeowners are reluctant to put their houses on the market. 

Two factors are behind the jump: rising interest rates on mortgages and skyrocketing housing prices. The average rate on a 30-year fixed-rate mortgage has nearly doubled since the beginning of the year to hit 6.70% last week, its highest since 2007, according to Freddie Mac. Coupled with the pandemic-era ballooning of property prices, monthly mortgage payments on newly-bought homes have soared.

But if you’re a homeowner who locked in a low mortgage rate at some point in the past, your housing budget hasn’t budged much at all. For example, if you’d bought a median-priced home in August 2012, your monthly mortgage payment back then was $671.37—and it’s not a penny more today (although your property tax and insurance bills may have gone up).

Little wonder that those who locked in a good rate and a nice low payment at some point in the past are loath to give that up. That’s a major reason why the supply of new homes for sale has remained depressed, Mark Fleming, an economist at real estate title and services company First American, wrote in a recent blog post. 

“Sellers have largely been staying put, given many enjoy a mortgage rate that may be nearly three full percentage points lower than the current market for mortgage rates,” Fleming wrote. “Since home sellers are also prospective homebuyers, homeowners choosing not to sell has reduced housing market potential.”

Have a question, comment, or story to share? You can reach Diccon at dhyatt@thebalance.com.