High-Income Consumers 64% More Inclined to Seek Mortgages

Contrary to conventional wisdom, a recent PYMNTS report, “Interest in Mortgages Rises Among Younger, High-Income Individuals,” uncovers that income level is a significantly stronger predictor than age in determining whether consumers currently hold a mortgage or are interested in obtaining one.

The study, based on a survey of 2,093 U.S. consumers conducted in October, highlights a widening disparity in access to housing and financial stability, with high-income individuals showing dramatically different mortgage behaviors compared to their lower-income counterparts.

The findings indicate that while overall interest in mortgages has generally declined, a notable exception exists among younger, high-income earners, who are the only demographic expressing growing interest in entering the mortgage market. This trend suggests resilient financial confidence within this affluent younger segment despite broader economic uncertainties.

The analysis reveals that high-income consumers, defined as those earning over $100,000 annually, are more than three times as likely to have an active mortgage compared to lower-income consumers, who earn less than $50,000 per year. Specifically, as of October, 44% of high-income consumers reported having a mortgage, while only 14% of lower-income consumers could say the same.

Furthermore, among those without mortgages, high-income individuals display the most significant interest in obtaining one, with 18% expressing such intentions, a figure 64% higher than the national average.

Notably, this interest has increased among high earners since the spring, contrasting with slight decreases observed across all other income brackets. This divergence underscores the growing divide in the housing market, presenting potential opportunities for lenders focusing on affluent borrowers.

Key data points from the report include:

High-income consumers are 64% more likely than the average consumer to express interest in obtaining mortgages.

Younger, high-income consumers (millennials and Gen Z) are the only segment showing growing interest in getting new mortgages, with their interest increasing by over 50% between April and October.

Among lower-income consumers, generational disparities in mortgage ownership are pronounced, with 17% of older individuals having a mortgage compared to only 8.8% of younger individuals.

Interestingly, while there is little difference in mortgage ownership between older and younger high-income consumers, significant generational gaps exist within the lower-income bracket. The report suggests that the higher mortgage rates among high-income individuals are likely due to factors such as greater savings for down payments and potentially higher financial literacy. The contrasting trends highlight the economic pressures and affordability concerns that are likely constraining lower-earning consumers from entering or showing interest in the mortgage market.