In 1971, George Lucas reported that his first feature film, the Baltimore Colts won Super Bowl V, with an average mortgage rate of 7.54% over 30 years. That rate is pretty close to what we see today.
Home prices at the time were not that great. In 1971, census data showed that typical home sales prices averaged $25,225 or about $195,000 in inflation-adjusted dollars in 2024.
However, last year, the typical home sales price actually averaged $418,975.
Meanwhile, median household income increased from around $10,300 per year in 1971 to about $80,600 in 2023.
Over the years, a changing combination of mortgage fees, home prices, income and inflation has made it harder than ever to become a homeowner, and mortgage payments are now increasing the more typical budget. Let’s take a look at how these have increased over the years.
How did monthly mortgage payments change over time?
Typical monthly mortgage payments have risen dramatically in recent years from around $1,100 in 2020 to twice the $2,207 in 2024 (if not adjusted for inflation). Adjusting for inflation, the increase is still close to $800 a month.
During the pandemic, home prices rose sharply, from an average selling price of $328,150 in 2020 to $418,975 in 2024. At the same time, the mortgage rate for fixed loans for 30 years rose sharply.
“Home buyers today raised $100,000 more than buyers five years ago, and do so at a rate of 7% rather than 3%.”
Similarly, mortgage payments rose 50 years ago. Prices and fees were also increased between 1971 and 1981, but the typical monthly mortgage payments went from about $1,100 to $2,650 inflation-adjusted amount in 2024.
Another: income. Between 1984 and 2021, the median household income ranged from $58,930 to $79,260. In that 37 year window, mortgage payments accounted for less than 20% of all household income except five years of that year.
This changed in 2022 when the costs of both home prices and mortgages increased rapidly. That year, the average selling price was $432,950, and mortgage payments ate roughly 31% of the household income of $77,540. In 2023, its share rose to almost 34%.
According to Bankrate’s 2025 Housing Affordable Survey, future home buyers now need an annual household income of around $117,000 to provide a median U.S. home home.
Other housing costs continue to rise. Let’s break down some aspects of homeownership:
- Property tax: Property taxes rose on average 27% between 2019 and 2024, according to Corelogic. In some states, the increase is much higher. For example, Colorado and Georgia tax bills have increased by more than 50% over the past five years.
- Homeowner Insurance: As of July 2025, Bankrate data shows that the national average homeowner insurance cost was $2,466 per year for an insurance policy with a $300,000 housing restriction.
- “Hidden” Cost: According to the hidden costs of Bankrate’s 2025 homeownership research, a typical single-family home costs over $21,000 a year to own and maintain. Aside from insurance and taxes, these costs include cable, energy and internet costs.
- Buyer’s Regret: Bankrate’s 2025 Home Affordable Report shows that 16% of homeowners who regret at least once about buying a home say they’re paying a mortgage too high.
I have an affordable mortgage payment, but it may not have panned out like that
I have not lost my mortgage payment jump in recent years. In 2021 my wife and I bought a new home from growing family and home for our work careers. After watching for over six months, I signed a purchase agreement and got a 2.99% mortgage. It closed two weeks before my son was born in early 2022.
If sales went down, or if I decided to wait for my son to buy until he arrives, that same house would have been out of our reach later in the year. We would have been shopping for mortgages at an interest rate of nearly 7%, and we would have increased by several hundred dollars a month.
We are evidence of the “lock-in effect” that prevents homeowners from moving new loans and doubling their monthly home costs in particular.
Still, life happens. Incomes change and so does housing market.
“If mortgage rates are ongoingly low, home prices cannot rise faster than home buyers’ income in a permanent way,” says McBride. “After the massive rise in home prices that has withdrawn the pandemic, most markets may be seeing a very slimy rise in home prices over the next few years as income and household purchasing power closes some of that gap.”
