ICE Mortgage Monitor: Monthly Payments Hit High Point in August
(Image courtesy of ICE; Breakout image courtesy of Curtis Adams/pexels.com)
Intercontinental Exchange, Atlanta, released its mortgage monitor for October, finding that the average monthly payment hit a record of $2,070 in August, up $140 from 2023 and $399 since the start of 2020.
All aspects of mortgage payments are rising, ICE, noted, with average principal, interest and tax payments up about 15-17% since the start of 2020. Home prices, loan balances, interest rates and taxes all have trended higher over the past few years.
However, insurance property costs are a particularly sore spot. The average monthly insurance payment is up 52% since the start of 2020, with increases in some higher-risk areas as high as 90% over the past four years.
On average, insurance premiums are accounting for 9.4% of monthly mortgage payments, up from less than 7.7% in 2013-2020. That’s the highest share of monthly mortgage costs on record. And, in high-risk areas, insurance costs can make up as much as 25% of a mortgage holder’s monthly costs.
“Higher home prices logically lead to higher-dollar policies; that’s why looking at the cost for every $1,000 of coverage gives us such critical, apples to apples, context,” noted Andy Walden, ICE Vice President of Research and Analysis. “Not only are homeowners paying 12% more today for the same dollar amount of coverage than they were, on average, from 2013-2022, but they’re also insuring a smaller share of the property’s underlying value. Given that coverage amounts are based not on a property’s market value, but its replacement cost, the average policy has also gone from covering over 100% of the average home’s value back in 2013-2015 to just 88% today.”
High property taxes have also pushed up costs in some areas, particularly in the Northeast, and parts of the Midwest and Texas. ICE specifically pointed to Rochester, N.Y. and Syracuse, N.Y., where property taxes account for more than 35% of the average monthly mortgage payment.
