Key Takeaways The average American mortgage balance reached $258,214 in mid-2025. Mortgage balances vary widely by age: Millennials carry the most mortgage debt of any generation, nearly $125,000 more than Baby Boomers. New homebuyers in December had a median monthly payment of $2,025. Americans with mortgages already know the sting of the modern housing market. What they might not know is how their pain compares to everyone else's. The average American with a mortgage carried a balance of $258,2 ...

Core Insights - Home values have increased nearly 50% over the past six years, rising from $243,398 in December 2019 to $357,275 in December 2025, leading to a significant increase in home equity for many homeowners [1] - Home equity can be utilized for various financial needs, but it is essential to recognize that it is not free money [1] - Borrowing against home equity to pay down a mortgage may not be beneficial, as it often results in trading one type of debt for another, which could have higher interest rates [1] Understanding Home Equity - Home equity is defined as the value of a home minus any mortgage or secured debt against it [3] - Initial equity is typically represented by the down payment made on the home, and it increases as the home value rises and the mortgage balance decreases [3] - The increase in home value and mortgage payments contributes to higher home equity, which can be borrowed against through home equity loans or lines of credit [4] Borrowing Against Home Equity - Lenders generally allow borrowing up to around 80% of a home's value across all housing debt, but accessing home equity is not free [4] - Home equity financing incurs interest charges, making it a costlier option for accessing funds [5] - While it is technically possible to use home equity financing to pay off a home loan, this approach is often counterproductive and comes with associated costs [6]

Housing Market - Mortgage debt as a share of the housing stock in America is at its lowest in 60 years [1] - This situation is a cause for concern for the industry [1]

Monetary Policy - The Bank of Korea maintained its benchmark interest rate to prevent a housing market rally [1] Financial Stability - Concerns exist that a housing market rally could lead to financial imbalances [1] - Rising mortgage debt levels are a potential threat to financial stability [1]

Mortgage Debt Trends - People over 70 in America hold more outstanding mortgage debt than those under 30 [1] - Historically, younger individuals acquired debt for homeownership and family raising [1] - Individuals over 70 were expected to have already paid off their mortgages [1]

Market Intervention - South Korea introduced new measures to control property prices [1] - Previous measures were insufficient to cool demand [1] Economic Concerns - Central bank is concerned about rising mortgage debt levels [1]

Housing Market Analysis - Pre-2008, home equity was approximately 38% higher than mortgage debt [1] - Currently, home equity is 156% higher than mortgage debt [1] - The US housing market is considered fundamentally flawed [1] Capital Allocation - Capital is misallocated within the US housing sector [1]