How American save for a mortgage

In the material, we’ll tell you what percentage of Americans can buy an apartment for the accumulated money, who is forced to take a mortgage, and how our compatriots save for a down payment.

How many mortgage loans do Americans take

Consider the statistics of the Bank of America for the past year by month:

  • in January, the volume of mortgage loans amounted to 168,394 million US.
  • in February – 226 515 million US.
  • in March – 224 226 million US.
  • in April – 239 625 million US.
  • in May – 190,067 million US.
  • in June – 214 822 million US.
  • in July – 221 973 million US.
  • in August – 236 039 million US.
  • in September – 239,213 million US.
  • in October – 271 256 million US.
  • in November – 270,328 million US.
  • in December – 345,059 million US.

As you can see, the Americans took the least mortgage loans in May. Most of all – in December. This is due to the fact that at the end of the year, the rate first fell to 9%.

Debt, including overdue, as of Feb 20, 2020, amounted to 7,470,183 million US.

The Central Bank also keeps statistics on early repayment of mortgage loans, including collecting data on the method of early repayment. In the first three-quarters of 2019, borrowers, at their own expense, paid a mortgage in the amount of US 679,668 million ahead of schedule. Wells Fargo routing number With the help of new loans, housing loans worth 10,468 million US was paid, 4,603 million US from the sale of the mortgaged property, and 77,090 million US from state subsidies.

The average mortgage term has increased

In 2019, CIAN conducted a study to find out under what conditions Americans take a mortgage. It turned out that the average mortgage loan term is 18 years. This is the data for the end of 2019. Interestingly, every year the average mortgage term is growing. In 2018, he was 17 years old, and in 2013 – 15 years.

The average loan amount is 2.24 million US. Of course, this amount is highly dependent on the region – population and cost per square meter of real estate. But annually the average loan amount is growing by 100 thousand US.

The top 5 regions of America in terms of the number of mortgage loans look like this:

  • Moscow – 80.8 thousand;
  • Moscow region – 71.4 thousand;
  • St. Petersburg – 64 thousand;
  • Tyumen region – 52.6 thousand;
  • Bashkortostan – 46.2 thousand

Great growth was also observed in Chechnya (26%) and Dagestan (16%). In many regions, the volume of mortgage loans, on the contrary, decreased. Most strongly – in the Ulyanovsk region (24.5%) and in the Nenets Autonomous Okrug (24%).

The CIAN believes that in 2020 the volume of mortgage issuance will remain at the level of 2018 and will exceed 3 trillion US. As for debt, it still makes up only 7% of America’s GDP. For comparison, in developed European countries, the figure is 20-50%.

Who can buy housing without loans?

Usaa routing number conducted a study and found out what percentage of the country’s population chooses a mortgage to buy an apartment. The survey involved more than 2,000 people from 17 major cities of the country. These are people who are going to buy real estate in the coming year. The respondents are mainly women aged 26-35 years with an income level of 30-60 thousand US. per month and at least one child.

How much do you save for a mortgage

Finding a mortgage without a down payment is quite difficult. Therefore, before future borrowers one way or another the question arises: where to find the money for the down payment? As a rule, banks set a minimum threshold of 15-20% of the cost of housing. Most of the Americans surveyed need between two and four years to accumulate this amount if they save 20% of their income every month. One year is enough only 17% of respondents. For the year, only 6% of respondents manage to save up for the first installment. Five or more years require 29% of Americans.

Having asked the respondents what are the sources of the down payment, the researchers obtained the following data:

  • 62% – own savings.
  • 23% – pledge of real estate.
  • 20% – mother capital.
  • 13% – sale of a property.
  • 10% – consumer credit .

How to save for a mortgage? 35% of respondents said that every month they set aside a predetermined equal amount. For example, if you plan to buy an apartment for 3 million US. with a down payment of 20% (600 thousand US), it will be possible to accumulate the required amount for 2 years by putting aside 25 thousand US. monthly.

This behavior is more common in women. Men are more likely to risk investing the accumulated money.

Most of the respondents keep their savings on a down payment at the bank. A third of Americans put aside cash at home. Only 7% of respondents invest them. Among other methods of accumulation, there are such solutions as the use of debit cards with a percentage on the balance or transferring cash to the grandmother for storage.

Female respondents admitted that they hoped for help from their parents or inheritance, while men prefer to receive money on the security of their real estate.

39% of respondents are ready to sell a car to cover the first installment, 25% – a cottage, 23% – other real estates. Among the answers, there were also a garage, household appliances, and gold


Leave a Comment