The Average Household Mortgage Debt

The average house sits on almost $150,000 in mortgage debt.

The average house sits on almost $150,000 in mortgage debt.

As of August 2013, the average U.S. household with a mortgage had $147,591 in mortgage debt, according to the NerdWallet website. That's in addition to almost $50,000 in credit card and student loan debt for households with those types of debt. Meanwhile, the median U.S. household income in June 2013 was $52,100 a year, according to an article in "The New York Times." Maintaining the right level of mortgage debt as a percentage of your income is an important part of building financial strength.

Mortgages and Other Debt

Mortgage debt is, by far, the largest debt that most Americans owe. As of the second quarter of 2013, the Federal Reserve reports that mortgage debt represented 71 percent of all consumer debts, with revolving equity lines adding another 5 percent. By comparison, the next largest type of debt, student loans, represented only 9 percent of all consumer debt. Car loans represented 7 percent and credit cards made up 6 percent.

Mortgages by Region

The Federal Reserve Board of New York reports on regional mortgage data on a slightly different basis than other sources. Instead of talking about the size of each mortgage, it adds up all of the mortgages in the country, or in a region, and divides that figure by the number of people who have credit files to find a per capita number. Because of this, its per capita numbers take into account people who live mortgage-free or even those that rent. While per capita data might not show how much each person actually owes on a mortgage, it's a useful tool to show relative debt levels by state. Based on this data, the average share of mortgage debt for each American that had a credit file was around $32,000 as June 2013. However, the amount of debt varied regionally. In Ohio, the per capita average was just over $20,000, while the average Californian had well over $50,000 in mortgage debt. Residents of Arizona, Illinois and New York were all close to the U.S. average.

Household Debt to Income

The Federal Reserve Bank tracks how much of a U.S. household's income goes to pay its mortgage and other debts. In the first quarter of 2013, the average U.S. home-owning household paid 8.67 percent of its income in mortgage payments. This is down from a recent high of 11.34 percent in the third quarter of 2007. These numbers may seem low because they include every home that is owned, including those that have already been paid off or that have very low mortgage balances. The inclusion of these homes skews the national average lower.

Debt to Income

The total debt-to-income ratio tracks how much money a household owes relative to its total income. When you're relatively young, it's normal to have a high ratio -- sometimes running well over 200 percent when you buy your first house. However, as you age, your ratio should come down as your income goes up and you gradually pay your debts down. Retiring with a debt-to-income ratio of zero means that you don't have to spend any of your savings to pay debt. Along the way to retirement, keeping your debts as low as reasonably possible isn't just good on paper. It also means that you get to keep more of every paycheck and either spend it on things that make you happy or save it. For a 20-year period from the mid-1960s through the mid-1980s, debt levels were around 60 percent to 70 percent of household income. After that point, they started to climb rapidly. At the peak in 2007, the average household owed 130.2 percent of its income, although it fell back down to 114.3 percent by mid-2011. The declining trend has continued, but as of September 2013 debt levels are still nowhere 60 percent to 70 percent.


About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

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