Ten States with the Worst Mortgage Debt

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5. Washington
> Mortgage debt per person: $225,581
> Median household income: $55,681 (11th highest)
> Credit card debt per person: $6,825 (17th highest)
> Change in home value (2006 – 2010): +1.6% (32nd biggest gain)

While Washington has the fifth-highest mortgage debt per person in the country, state residents tend to be more frugal in their other finances. Compared to other states, Washington has only the 17th highest credit card and auto debt per capita, and has the 13th-lowest student debt. Washington’s median home value in 2010 was the ninth-highest in the country. Home values actually increased 1.6% during the recession. As a result, foreclosures in the state are low, despite the fact that the state has the 16th highest unemployment rate in the country and a high poverty rate of 12.5%.

4. New Jersey
> Mortgage debt per person: $236,017
> Median household income: $67,681 (2nd highest)
> Credit card debt per person: $7,608 (4th highest)
> Change in home value (2006 – 2010): -7.5% (9th biggest decline)

Most of the states hit hardest by the housing crash had a great deal of new buildings approved in the first half of the decade. This was the case in places like Nevada, California and Arizona. Because all of these new buildings were built at peak home prices, they had the farthest to fall when home prices collapsed. New Jersey, however, had the ninth-fewest building permits approved in 2006. Nevertheless, median home prices declined nearly $30,000, or the ninth-most in the country. However, since residents have the second highest median income in the U.S., they have been able to bear the loss in their home values. New Jersey had the ninth-fewest foreclosures in the country in December.

3. Maryland
> Mortgage debt per person: $242,445
> Median household income: $68,854 (the highest)
> Credit card debt per person: $7,226 (10th highest)
> Change in home value (2006 – 2010): -9.9% (7th biggest decline)

According to Credit Karma, the average mortgage debt per person in Maryland is nearly $250,000. This is at least partially a result of the fact that the state has the fifth-highest median home value in the U.S., as well as the highest median household income in the country. Like New Jersey, Maryland had a very small number of homes built before the recession. Also like New Jersey, home values still declined significantly. Nevertheless, wealthy Maryland residents have been able to weather the worst of this decline. The state had the 12th-fewest foreclosures in December, and the average credit score per resident is 12th best.

2. Hawaii
> Mortgage debt per person: $307,508
> Median household income: $63,030 (5th highest)
> Credit card debt per person: $7,527 (7th highest)
> Change in home value (2006 – 2010): -0.8% (15th biggest decline)

Hawaii has the highest median home value in the country at $525,000. This is $154,000 more than the next highest state. Needless to say, taking out a mortgage on a home in the island state is a tremendous financial commitment. But with extremely low unemployment, high median income, low poverty and the second-highest rate of health insurance coverage in the country, Hawaii homeowners can generally afford it.

1. California
> Mortgage debt per person: $313,749
> Median household income: $57,708 (9th highest)
> Credit card debt per person: $6,434 (30th highest)
> Change in home value (2006 – 2010): -30.8% (2nd biggest decline)

While most of the residents of the states with the highest mortgage debt have been able to support the massive mortgages despite the fact that their homes have lost significant value, California is a different story. In 2006, California had the most expensive homes in the country, with a median home value of $532,000. By 2010, that value had declined by $164,000 — more than 30%. The effects of this massive decline in home prices had wide-reaching effects on the state economy. Unemployment in California is now the second-highest in the country, and 14.5% of the population lives below the poverty line. The average mortgage debt per person of $313,749 has been too much for thousands of residents. In December alone, one in every 252 homes was foreclosed upon.

Michael B. Sauter