Mortgage expenditures decline year over year in 2016

by Francis Monfort06 Jul 2018

Homeowners with a mortgage saw a slight decline in their average expenditures on mortgage interest and charges in 2016 from 2015, according to the Consumer Expenditure Survey for 2016 released by the Bureau of Labor Statistics (BLS).

Mortgage-related expenditures averaged $7,934 in 2016, down from $7,939 in 2015. The 2016 average marks a drop from 2007 when homeowners with a mortgage spent $8,779 for these expenses. BLS said the expenditure decline reflects the continuing trend of lower interest rates seen after the start of the 2007 to 2009 recession.

The survey also found that homeownership rates have not climbed back to pre-recession levels despite the economic recovery that began in 2009. BLS attributed the overall trend of fewer consumer units owning homes to the recession. From 2000 to 2010, homeownership rates stayed between 66% and 68%, but in the current decade, the rate has fallen steadily to 62%.

Although mortgage expenditures declined, the survey revealed that consumer spending increased 2.4% in 2016. The latest gain follows an increase of 4.6% in 2015. The survey found that the average annual expenditures by consumers units increased to $57,311 in 2016 from $55,978 in 2015.

Along with the growth in consumer spending, the average income before taxes also posted an increase over the same period. Income before taxes averaged $74,664 in 2016, an increase of 7.2% from the $69,627 average income before taxes in 2015.

 

Related stories:
Housing affordability improves in Q1 on strong wage growth
Millennials want to buy homes, but rising prices hold them back

 

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