Buying a house has always been one of the pillars of the American dream. But house ownership has always come with the massive burden of a mortgage payment.
The cost of a house is generally larger than any debt that Americans take on — and the debt is usually taken on later in life when Americans have a larger income — so it’s no surprise that for years, mortgage interest payments in the country has been well above the interest payments for all other sources of debt.
At least, until now.
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According to a report by Bloomberg, non-mortgage interest payments such as credit card and student loan debt have almost equaled that of the total annual mortgage interest in the country.
The report said that the annual interest payments for mortgage hit an annual rate of $573.4 billion in January, just a few million short of the $578.3 billion annual mortgage interest for the final quarter of 2023.
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These two numbers have never been virtually equal since the data from the Bureau of Economic Analysis started in 1978, when the report states that mortgage interest was actually around double of non-mortgage debt.
The report points to the 2008 recession as a reason for the equalizing of the two numbers. Loans for homes were cheaper during that period, so many who were able to buy a house were able to get a favorable deal.
Meanwhile, interest rates for non-mortgage loans like credit cards have continued to rise. As of late 2023, Americans have over $1 trillion in credit card debt which hold an average interest rate of nearly 28%, according to Forbes.
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