At what age do most people finish paying their mortgage?
But with nearly two-thirds of retirement-age Americans having paid off their mortgages, it means that the average age they have gotten rid of that debt is likely in their early 60s. Stats from 538.com, for example, suggest the age is around 63.
40% of Americans Pay Off Their House — Are They Doing Better Financially? For most Americans, a home mortgage is the biggest financial obligation they will ever have. A traditional mortgage spans 30 years and is often in the hundreds of thousands of dollars, so the interest charges can be enormous.
But is there a right age when these factors should be in place? And are these the factors Americans should consider when deciding to become a homeowner for the first time? In 2022, the average age of first-time homebuyers was 36, according to the National Association of Realtors (NAR).
Homeowners typically make their normal monthly mortgage payments and expect to pay off their homes over 30 years. However, there are ways to pay it off even faster using three proven strategies.
You may want to stick to a shorter-term loan
But if you sign a 30-year mortgage in your 50s and you don't accelerate your payments, then you can pretty much bank on not paying off your home until you reach your 80s.
“Today's first-time buyers are due to pay off their mortgage at 65-years old on average, compared to 53 in 1990 as sky-high house prices force buyers to extend their mortgage term to make their payments more affordable. “Rising mortgage terms mean more of us will still have housing costs in retirement in the future.
Similarly, states along the Pacific Coast—where home values skyrocketed during the pandemic—have some of the lowest rates of free-and-clear homeownership among the working-age population. California (22.7%), Washington (22.8%), and Oregon (22.9%) sit at 45th, 44th, and 43rd out of all 50 states, respectively.
47% of Americans have lived in their homes for six to 10 years. 35% of homeowners have lived in their homes for 10 to 15 years. 16% have lived in their homes for less than five years. The average length of homeownership years is eight years.
While there are a lot of factors involved, the average age when people move out of their parent's home is somewhere between 24 and 27. This makes logical sense – it's after many people have completed college and around the time when most people get married and/or are in a long-term relationship.
The average lifespan of a house in the United States is between 50 and 63 years, from construction to demolition.
How much do most people owe on their mortgage?
| Average Mortgage Balance by Generation | ||
|---|---|---|
| 2021 | 2023 | |
| Generation X (43-58) | $259,437 | $278,935 |
| Baby boomers (59-77) | $182,247 | $191,557 |
| Silent Generation (78+) | $135,162 | $142,644 |
Paying off your mortgage and owning your home outright is a major financial goal for most homeowners. Among the numerous benefits of being mortgage-free are the freedom from a major financial obligation and the potential to save thousands of dollars in interest payments.
The average mortgage debt balance per household was $241,815 as of Q2 2023, a 4 percent increase from 2022. The average mortgage balance exceeds $1 million in 26 U.S. cities, including 18 cities in California.
When you're in your 50s, buying a house might cut into your retirement savings significantly, if it pushes your living costs up much higher. Maximizing your retirement contributions may ultimately net you more money than the cash you'd save by paying off a mortgage in the 15 or 20 years before you retire.
Renting can be less expensive as you skip the burdens of property taxes and maintenance costs. However, owning can be less stressful since you don't have to worry about a landlord raising your rent. Whichever route you go, housing costs will be one of your major monthly expenses in retirement.
Thanks to the Equal Credit Opportunity Act, a lender can't discriminate against an applicant due to age, says the Consumer Finance Protection Bureau (CFPB). You could be 99 years old and get a 30-year mortgage as long as you qualify.
"Shark Tank" investor Kevin O'Leary has said the ideal age to be debt-free is 45, especially if you want to retire by age 60. Being debt-free — including paying off your mortgage — by your mid-40s puts you on the early path toward success, O'Leary argued.
Average Retirement Debt: The Numbers
More than half say they intend to enter retirement debt free, but only one-quarter of retired Boomers actually are debt free.
“A life free from mortgage payments is psychologically liberating, but a well-funded retirement is essential for long-term financial security and peace of mind.”
Here's how many Americans are homeowners
According to the Federal Reserve, the homeownership rate in 2022 was 66.1%, up slightly from 64.9% in 2021.
Do 40 of homeowners have no mortgage?
The housing market is historically unaffordable - but a record number of Americans now own their home without a mortgage. The share of US homes without a mortgage jumped five percentage points from 2012 to 2022 to a record near 40%, Bloomberg reported. More than half of those homeowners are at retirement age.
In 2022, nearly 40% of U.S. homeowners owned their homes outright, according to Census Bureau data analyzed by Bloomberg. In total, 33.3 million single-family homes and condos were mortgage-free, a 31% increase compared to 25.4 million homes a decade ago.
As a REALTOR® might tell you, in order to make up for closing costs, real estate agent fees, and mortgage interest, you should plan to stay in a property for at least 5 years before you sell your home.
Either way, buying a home is a major decision, and it's one you'll want to be sure about. How many times should you visit a house? Experts say you should visit a home 3-6 times before making an offer. It may not always be possible to visit numerous times, especially in hot markets, but if you can, you should.
Among states, long-term tenure topped out in Hawaii, where 36 percent of homeowners have been under the same roof for 24 years or more. New York was next, with about 35 percent of homeowners staying put during the same period. Do high home prices in both states have something to do with it?
