Collectively, Americans carry trillions in household debt. And the biggest single element of that burden by far is mortgage debt: It comprises close to $12 trillion of the $17.29 trillion overall.
Latest statistics on average mortgage debt
- The average mortgage debt balance per household is $241,815 as of Q2 2023, a 4% increase from 2022.
- The total mortgage debt balance in the U.S. is $12.14 trillion as of Q3 2023, an increase of $126 billion over the previous quarter.
- The average mortgage balance exceeds $1 million in 26 U.S. cities, primarily on the East and West Coasts.
- Mortgage originations collectively total $386 billion, as of Q3 2023, well below the trillion-dollar levels in 2020-21.
- Total home equity line of credit debt equals $349 billion as of Q3 2023, more than a $25 billion year-over-year increase.
- The average credit score for purchase mortgage holders is 733 as of November 2023.
- The total debt service to income ratio (DTI) of U.S. households is projected to rise to 11.7% by 2025, up from 9.9% in 2022. The mortgage DTI alone will increase to 4.5%.
- Total U.S. household debt is$17.29 trillion as of Q3 2023, an increase of $3.1 trillion since the end of 2019.
Annual average mortgage debt
Mortgage debt is the heavyweight when it comes to household debt, dwarfing credit card balances, student loans and auto loans. After the tough blow dealt by the 2007-08 subprime mortgage crisis, the annual average mortgage debt declined sharply. However, since 2013, the pendulum began to swing back, with mortgage debt on a steady rise. Since the pandemic, increases in home prices and in interest rates kicked the climb into overdrive.
So, what does this mean for the annual average American mortgage debt in 2024? With housing inventory still tight, interest rates still elevated, and people seeking larger homes to accommodate their evolving lifestyles, mortgage balances will likely continue to grow, though perhaps at a slower pace.
Most common types of debt
Mortgages continue to be a significant portion of household debt in the United States, with a current total of $12.14 trillion owed on 84 million mortgages. This equates to an average American mortgage debt of $144,593 per person listed with a mortgage on their credit report. Despite interest rates hovering above 7 percent, mortgage demand remains strong, driven by two key factors: an increase in the number of people seeking mortgages, and larger mortgages at that.
The record-low mortgage interest rates of recent years allowed buyers to purchase higher-priced homes or refinance their existing mortgages while maintaining low monthly payments. This has led to a rise in outstanding mortgage debt, which currently accounts for 70.2 percent of consumer debt in the U.S., according to New York Federal Reserve figures.
Here’s a look at the other common types of debt among American households, based on credit reporting company Experian’s midyear consumer debt review:
- Auto loans. In the year between Q2 2022 and Q2 2023, auto loan debt witnessed a 5.8 percent increase, rising from $1.42 trillion to $1.5 trillion. This rising trend in auto loan debt can be attributed to persistent inventory shortages, escalating prices for new and used vehicles, and supplementary expenses such as auto insurance.
- Credit card debt. Between Q2 2022 and Q2 2023, credit card debt surged by 16.3 percent, amounting to a total of $1.02 trillion. This increase is largely attributed to factors such as inflation and increasing credit card interest APRs. In a similar vein, unsecured personal loans also saw a 21.3 percent growth spurt, moving from $156.1 billion in 2022 to $189.4 billion in 2023.
- Home equity lines of credit (HELOCs). As of Q2 2023, HELOCs have seen an 8.5 percent increase compared to the same quarter in 2022, reaching a total of $322 billion. This growth can be attributed to several factors. Firstly, the ongoing rise in home prices has increased homeowners’ equity, making it easier for them to tap into their home’s value through HELOCs. Additionally, the current high interest rate environment has made borrowing against home equity more attractive than refinancing a mortgage or taking out other types of loans.
- Student loan debt balances. Student loan debt has long been a significant player in U.S. household debt. However, an 8 percent decrease occurred between Q2 2022 and Q2 2023, with loan balances falling from $1.51 trillion to $1.39 trillion. Influential factors behind this decline include the moratorium on interest on student loans, borrowers making payments during the three-year payment pause that concluded this year, and loan forgiveness initiatives introduced by the Department of Education.
Average mortgage debt by generation
Americans generally begin taking on debt as young adults, taper off their pace of borrowing in middle age and work to pay off loans near or during retirement.
| Generation | Average mortgage debt |
|---|---|
| Generation Z | $229,897 |
| Millennials | $295,689 |
| Generation X | $277,153 |
| Baby boomers | $190,441 |
| Silent Generation | $141,148 |
Source: Experian
For each generation, this trend has taken place in tandem with mortgage rate fluctuations and home price appreciation, which has accelerated dramatically in recent years. In February 2012, the median existing-home price was $155,600, according to the National Association of Realtors. By the same time in 2017, the median was $228,200. As of November 2023, the median home price was $387,600.
States with the highest and lowest mortgage debt
These states had the highest average outstanding mortgage balance per borrower as of the end of 2022, according to Experian:
- District of Columbia – $492,745
- California – $422,909
- Hawaii – $387,277
- Washington – $331,658
- Colorado – $319,981
In these states, borrowers are much closer to paying off their home loans:
- West Virginia – $124,445
- Mississippi – $139,046
- Ohio – $139,618
- Indiana – $141,238
- Kentucky – $144,222
How mortgage debt compares to other household debt
In comparison to other types of household debt, mortgage debt often tends to take the lion’s share — largely due to the substantial cost of real estate (a home is likely to be the single biggest asset an individual ever purchases). While mortgage debt tends to be sizable, it is spread over a lengthy period, usually over a term of 15 to 30 years. This mitigates its impact on a household’s monthly budget, especially when compared to high-interest, short-term debt like credit card balances.
That longevity works to borrowers’ advantage in another way: Lenders often view mortgage-holders favorably for their demonstrated ability to manage large, long-term financial commitments. In fact, in contrast to other obligations, a mortgage is often viewed in a positive light by creditors, because — unlike with personal loans or credit card bills — your payment acts as an investment in an appreciating asset. Each monthly installment you pay reduces the principal owed on your house, increasing your stake in the property over time. This home equity can later be leveraged for financial liquidity or for securing lower-interest loans — or just held onto, enhancing your net worth and those of your descendants.
In short, a mortgage is considered “good debt,” due to its role in building equity, growing wealth and demonstrating creditworthiness.
As an expert in personal finance and economic trends, my comprehensive understanding of the current state of household debt in the United States allows me to shed light on the intricate details presented in the provided article. My expertise is grounded in extensive research, data analysis, and a deep understanding of economic indicators, making me well-equipped to provide valuable insights into the dynamics of mortgage debt and its implications on the American economy.
The article begins by emphasizing the staggering amount of household debt carried by Americans, with a significant focus on mortgage debt, which constitutes nearly $12 trillion of the total $17.29 trillion. I am well aware that these figures are not mere statistics but represent the financial realities that impact millions of households.
The latest statistics highlight that the average mortgage debt per household stands at $241,815 as of Q2 2023, indicating a 4% increase from the previous year. This upward trend aligns with my understanding of the economic landscape, where factors such as rising home prices and interest rates have accelerated the growth of mortgage debt.
Furthermore, the article provides insights into mortgage originations, home equity line of credit (HELOC) debt, average credit scores for mortgage holders, and the projected debt-to-income ratio (DTI) for U.S. households. I recognize the significance of these metrics in assessing the overall financial health of individuals and the broader economy.
The comprehensive breakdown of the most common types of debt in American households adds depth to the analysis. Mortgage debt, despite interest rates above 7%, remains the predominant form of consumer debt, accounting for 70.2% of total consumer debt in the U.S. Auto loans, credit card debt, unsecured personal loans, and HELOCs are also discussed, providing a holistic view of the debt landscape.
The article delves into the average mortgage debt across different generations, reflecting the evolving patterns of borrowing and repayment. This information, coupled with insights into the states with the highest and lowest mortgage debt, enhances our understanding of regional disparities in housing finance.
Lastly, the article emphasizes the unique nature of mortgage debt, portraying it as "good debt" due to its role in building equity, growing wealth, and showcasing creditworthiness. This aligns with my knowledge that, despite its substantial size, mortgage debt is often viewed favorably by creditors for its long-term and asset-building nature.
In summary, my expertise allows me to dissect and contextualize the information presented in the article, offering a nuanced understanding of the complexities surrounding mortgage debt in the United States and its broader economic implications.
