Many homeowners are spending more on insurance and property taxes than on their mortgage, an alarming new study has found.
According to an analysis by Intercontinental Exchange, home insurance prices are rising due to natural disasters and rising repair costs, and property taxes are also rising as home values rise.
With this combination, 32% of the average single-family mortgage payment in September went toward property taxes and home insurance, the highest percentage on record dating back to 2014, the study found. .
The study found homeowners in two upstate New York towns, Rochester and Syracuse, as well as Omaha, Nebraska, New Orleans and Miami, were among the hardest hit. Quoted by the Wall Street Journal.
At least a quarter of mortgage holders in these cities spend more than half of their monthly payments on taxes and insurance, the study found.
In Rochester, 35% of homeowners who take out a mortgage on their property spend more than half of their monthly payment on taxes and insurance.
In Syracuse, that rate is 34%.
The five cities mentioned are known for having high property taxes, expensive home insurance, or both.
Rochester, a city of over 200,000 people on the shores of Lake Ontario, has a median property tax rate of 2.95%, which is significantly higher than the national median of 0.99% and the New York state median of 2.39%. According to the site Ownwell.com.
of Median property tax in Syracuse That's also higher than the national and state-wide median of 1.93%.
In New Haven, CT, more than 1 in 5 homeowners (21%) pay more in taxes and insurance each month than their mortgage.
Meanwhile, private insurance companies are evacuating Miami and New Orleans because their hurricane and tropical storm claims cannot cover high premiums.
Nationwide, taxes and insurance make up more than half of mortgage payments for 9% of single-family homeowners, the magazine said.
In 2014, that number was less than 4%.
Mortgage rates remain relatively high, even though the Federal Reserve has cut interest rates three times this year.
The average interest rate on a standard 30-year fixed mortgage was 7% on Tuesday, up 0.21% from last week.
The average interest rate for a 15-year fixed mortgage was 6.27%, an increase of 0.16% from a week ago.
Experts say that although mortgage rates are down from their 2023 highs, average rates are unlikely to stay below 6% for a while.
“Mortgage rates haven't fallen as much as we expected, and affordability will continue to be an issue,” said Lisa Sturtevant, chief economist at real estate firm Bright MLS. he told CNET.com.
President-elect Donald Trump pledged during his campaign to lower mortgage rates to around 3%, where they were before the coronavirus pandemic began in spring 2020.
Sales of newly built single-family homes in October were at their lowest level in about two years, as buyers were hesitant due to rising mortgage rates and activity was suspended due to the hurricane. I felt depressed.
New home sales in October fell by a seasonally adjusted annual rate of 17.3% to 610,000 units, the lowest level since December 2022, according to the Commerce Department's Census Bureau.
