Another Top-10 List — States With the Greatest Per Capita Mortgage Debt

As home values continue to rise and subprime, low-down lending remains constrained (except for the 3 percent down FHA loan program), total residential lending debt and the corresponding per capita mortgage debt expands. MarketWatch reports that 72 percent of the $8.74 trillion of U.S. household debt is made up of residential mortgages.

So what states have the greatest per-capita mortgage debt? According to Credio, Hawaii has more than all at $51,770 per capita. See the following table ranking the top-10 states in per capita mortgage debt.

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The problem with this approach, however, is that each state has a differing number of people per household. To adjust for that, the following table converts the per capita mortgage debt to per household. The adjusting factor was the average household size from 2009 through 2013 as reported by the U.S. Census Bureau. In contains just the 10 states included in the previous table and thus is no longer a ranking of all states – just the top 10 in per capita mortgage debt.

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This still, however, is misleading since homeownership rates vary from state-to-state. To make a final adjustment, the per household mortgage debt was adjusted based on the 2014 state-specific homeownership rate. The following table divides per household mortgage debt by the homeownership rate, showing the typical debt per homeowner.

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A final level of debt burden would be mortgage debt as a multiple of median household income. This last table shows typical per household mortgage debt for homeowners in relation to income.

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The typical California homeowner, at least in comparison to the 10 states with the greatest per capita mortgage debt, has the greatest debt burden in relationship to income. Compared to homeowners in Connecticut, for example, Californians have more than double the debt burden when viewed in light of income.

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The bottom line is that the debt burden of U.S. homeowners varies significantly from state-to-state. The high level of homeowner debt in California does raise some concern – particularly if the U.S. economy hit a hiccup and dipped into recession.


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