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Zillow’s most recent real estate market information uncovers a surprising pattern: the standard monthly mortgage disbursement has risen by 106% from December 2019 (pre-outbreak) to December 2024. This implies that present-day mortgage outlays are more than twice what they were five years earlier.
As per Zillow’s December 2024 assessment, the typical monthly mortgage payment in the United States has reached $1,844. In December 2019, prior to the pandemic, this number was just $896.
What prompted this remarkable rise? Inflation was a factor. In June 2022, the U.S. inflation rate hit a multi-decade peak of 9.1% before progressively dropping below 3%. However, even considering inflation over the five-year period, the $896 mortgage payment from December 2019 would have only increased by 23% to roughly $1,100.
The spike in mortgage rates had an even larger effect. In December 2019, the average 30-year fixed mortgage rate, as reported by Freddie Mac, was approximately 4%. By December 2024, this rate had risen to almost 7%.
This 3% disparity in interest rates has a considerable consequence. For instance, a $250,000 loan with a 3.75% interest rate would result in a monthly payment (principal and interest, excluding insurance and taxes) of $1,158. If the rate escalates to 6.75%, the monthly payment on a 30-year loan increases to $1,621.
How We Monitor the Most Favorable Mortgage Rates
The Zillow Mortgage API furnishes the nationwide and state typical percentages detailed earlier. These statistics are not adjusted and depend on an 80% loan-to-value proportion (implying at least a 20% initial payment) along with a borrower’s credit standing between 680 and 739. Consequently, these percentages depict what a borrower could anticipate being presented by a lending institution based on their distinct scenarios, which could vary from more enticing percentages publicized. © Zillow, Inc., 2024. Utilization undergoes Zillow’s Terms of Use.
