The American Council of Realtors has released its latest survey of home buyers, and it shows that the average mortgage payment has fallen to $300,000.
The group also noted that the percentage of homeowners with a mortgage payment below $300 a month dropped from 15% in 2016 to 8.5% in 2017.
“As the U.S. economy improves and mortgage rates drop, homeowners are more willing to pay more on their mortgages than they were a year ago, especially when it comes to mortgage modifications,” said John P. Mankiw, CFA-CIO chief economist.
“In 2017, the median payment on a 30-year fixed-rate mortgage was $5,500, down from $6,500 in 2016 and $6.00 in 2017, while the median payments on the 20-year adjustable-rate mortgages were $3,600, down by $500 in 2017 and $3.00 last year.”
The median loan payment is also expected to increase by 2.4% in 2018 and 2.7% in 2019.
The median monthly payments are expected to rise by 5.5%, 6.3% and 6.8% in 2020, 2021 and 2022, respectively.
The number of new home sales is expected to decline by 2% this year, 2.5 and 3.6% in 2021, 2022 and 2024, respectively, the report said.
“Homebuyers are finding it easier to save for a down payment and, in turn, lower their mortgage payments,” Mankiiz said.
Homeowners are also saving on their mortgage with a new adjustable-loan payment option, which is a variable payment on the home.
“This option allows homebuyers to make payments on time while increasing the loan size, thereby increasing their mortgage savings,” Manksaid.
“The adjustable-fee loan payment option has a 30% down payment with an average payment of $3 , which is about the same as the 30% fixed-interest rate that most mortgage companies offer.”
Mankitiw also said that homebuyer sentiment has improved, with more Americans now identifying as being satisfied with their home.
That sentiment is especially strong among millennials, with 63% of millennials saying that they are satisfied with the home they own, up from 46% in March 2017.