More than 80% of new home sales in the United States are financed by a mortgage, according to a new report by real estate analytics firm CoreLogic.
But even those who get the loan can’t afford the full cost of the house.
And those who do can end up with significant gaps in their finances, the report found.
In fact, a home with a loan balance of $500,000 or more can cost up to $2 million more than a similar home without a mortgage.
So even if you can pay off your mortgage in full, it can still be prohibitively expensive for many.
CoreLogic surveyed 1,000 home buyers and found that the average cost of a new single-family home is $1,971,500, or $5,766 per month.
The median home price is $5.1 million.
For many people, the upfront cost of moving in is so high that it becomes prohibitive.
In one-bedroom apartments in Washington, D.C., the average rent is $2,095 a month.
In Houston, the median rent is just $1 per month and in Austin, it’s $1.
The average monthly mortgage payment is $3,898.
And if you’re looking to save money on your mortgage, CoreLogica said that some people are struggling with the cost of their bills.
A recent survey of 2,000 mortgage borrowers by Credit Suisse found that nearly one-third said they had missed payments because they were living paycheck to paycheck.
The average monthly debt for people in this income bracket was $9,600.
Another study found that a majority of people have never applied for a mortgage in the past, with only 26% of borrowers choosing to move.
This is a major reason why a typical home purchase can end in foreclosure, according in CoreLogics report.
There’s a reason why some lenders are cutting interest rates to zero: the market is oversupplied with home loans.
Even if you do manage to get a mortgage with a low interest rate, Corelogic found that you’ll still have to pay more than $2.5 million in principal and interest over the first five years of ownership.
While a home buyer who can afford the mortgage can afford to pay for renovations, the average owner who’s willing to pay the upfront costs will likely be paying for the full repair costs for a home that was never built to begin with.
CoreLogics survey found that most homeowners who own homes don’t want to pay upfront.
Instead, they typically want to make sure their home has a long-term value, according the report.
The study said the average homeowner will pay $1 million to $3 million in total over the life of the home, which is much more than what the average home buyer would have to shell out on renovations.
It’s important to remember that if you’ve been paying off a mortgage for many years, you may have more room for improvement.
But the cost may be even higher when you’re still in the middle of a home remodel.
If you have questions about mortgage interest rates, CoreInfo can help.
You can also ask us a question in our mortgage lending forums.