Household Mortgage Burden

dv

• 1 min read

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Overview

I was always curious how to best display the growing cost of owning a home in the United States over time. What I ultimately settled on was the intersection of three datasets:

  1. Real Median Household Income in the United States - Fred Link
  2. 30-Year Fixed Rate Mortgage Average in the United States - Fred Link
  3. Median Sales Price of Houses Sold for the United States - Fred Link

Household mortgage burden (HMB) was born to effectively display what percentage of a household's income would go to making mortgage payments.

Calculation

Given 30-year fixed mortgage rate and home sales price, you can calculate the fixed, monthly cost of the mortgage payment that includes interest + principal. That mortgage payment, multiplied by 12, represents the total, yearly cost of principal and interest payments. That yearly cost divided by the median household income represents the HMB.

Limitations

These calculations effectively assume 0% down, and exclude normal expenses like property taxes, insurance rates, or mortgage insurance. The former two varying wildly depending on region.

Other

If you'd like the data yourself, access it at my API endpoint.