Millennials purchasing homes in D.C. may be looking down a debt barrel.
As mortgage rates fall to historic lows, homeowners and homebuyers have been rushing to take advantage of low rates. But for millennials in expensive housing markets, even low rates can’t save them from high mortgage balances. According to data from Experian, millennials across the nation have some of the highest mortgage balances, with millennial homeowners in Washington, D.C., ranking at the top.
D.C. isn’t the most expensive metro housing market (that title goes to King County, New York). According to Bright MLS, the average price of a home is in D.C. is $450,000. The average mortgage debt for D.C. millennials is $450,985, compared to $416,848—the average mortgage debt in D.C. for residents of all ages. People in the millennial age group (or those aged 23 to 38), also experienced the highest year-over-year increase in mortgage debt, according to Q1 2019 data.
Overall, millennials don’t hold the highest average mortgage debt; that honor goes to Generation X. Nationally, millennials had an average mortgage balance of $222,111 vs. Generation Xers at $237,753. Often called the forgotten generation, this age group, aged 39 to 54 currently, has held the highest average mortgage balance for two years.
The news isn’t all bad. Average FICO scores for all age groups was 703, with millennials in Washington, D.C., holding strong at 698. The average FICO score for millennials nationwide is only 667. FICO scores can affect the interest rate and terms given to a borrower when applying for a mortgage.
Millennials in Hawaii have the next highest average mortgage balance at $408,167. States trailing behind Washington, D.C., and Hawaii are California, Washington, and Massachusetts. Mortgage balances for millennials in nearby Maryland and Virginia were lower, but still ranked in the top 10. Virginia came in at No. 10 at with an average of $269,848, and Maryland ranked at No. 8 with a balance of $279,731.
Do you think housing prices in the D.C. metro area are too high? What do you think about these statistics? Tell us in the comments!