Many homeowners are spending more on insurance and property taxes than they spend on their mortgage, according to a troubling new study.
According to an analysis by Intercontinental Exchange, home insurance prices have skyrocketed due to natural disasters and rising repair costs, while property taxes have increased as the value of homes has increased.
The study found that the combination resulted in 32% of the average single-family mortgage payment going to property taxes and home insurance in September, the highest rate ever for data dating back to 2014.
According to the study, homeowners in two upstate New York cities — Rochester and Syracuse — as well as Omaha, Neb., New Orleans and Miami are hardest hit by the burden. Cited by the Wall Street Journal.
The study found that at least a quarter of mortgage holders in those cities spend more than half of their monthly payments on taxes and insurance.
In Rochester, 35% of homeowners with mortgages on their properties spend more than half of their monthly payments on taxes and insurance.
In Syracuse the rate is 34%.
The five cities mentioned are known for having high property taxes or expensive home insurance – or both.
Rochester, a city of over 200,000 people located on the shores of Lake Ontario, has an average property tax rate of 2.95%, significantly higher than both the national average of 0.99% and the New York State average of 2.39%. According to the site onwell.com.
Average property tax rate in Syracuse Also high relative to the nationwide and statewide average – 1.93%.
In New Haven, Conn., one in five homeowners – 21% – pay more for taxes and insurance than their mortgage each month.
Meanwhile, private insurers have fled Miami and New Orleans because hurricane and tropical storm claims do not make for the high premiums.
Nationwide, taxes and insurance make up more than half of mortgage payments for 9% of single-family homeowners, according to the Journal.
In 2014 this number was less than 4%.
Mortgage rates remain relatively high despite the Federal Reserve cutting its interest rates three times this year.
The average rate for a standard 30-year fixed mortgage was 7% on Tuesday – an increase of 0.21% from last week.
The average rate for a 15-year fixed mortgage is 6.27% – up 0.16% from a week ago.
While mortgage rates have fallen from 2023 highs, Average rates unlikely to fall below 6% According to experts, for some time.
“Mortgage rates are not going to be as low as we had hoped, and affordability will still be a challenge,” said Lisa Sturtevant, chief economist at real estate agency Bright MLS. told CNET.com.
newly elected president donald trump Pledged during the campaign To bring mortgage rates down to around 3% – which is where they were before the start of the coronavirus pandemic in the spring of 2020.
sale of New single-family homes demolished October’s lowest level in nearly two years, possibly a increase in mortgage rates Buyers were sidelined and the storm disrupted activity.
The Commerce Department’s Census Bureau said new home sales fell 17.3% in October to a seasonally adjusted annual rate of 610,000 units, the lowest level since December 2022.
