The COVID-19 pandemic fueled a surge in demand among homebuyers that is only now beginning to show signs of slowing. This historic demand coincided with low borrowing costs, limited housing inventory, and labor and materials bottlenecks that have been hampering new construction. These factors have pushed home values to all time highs, forcing many buyers to take on mortgages that put them deep in debt.
According to a recent report from Experian, a consumer credit reporting company, American homeowners with a mortgage had an average unpaid balance of $229,242 in 2020. Mortgage debt can be impacted by multiple regional factors, and as a result, the amount of debt American homeowners are paying down varies considerably by state.
Using data from Experian’s 2021 State of Credit Report, 24/7 Wall St. identified the states with the highest average mortgage debt. States are ranked by the average debt among homeowners with a mortgage.
All other things being equal, average mortgage debt is impacted most by real estate values. Overwhelmingly, in states where the median home value is less than the $240,500 national median, average mortgage debt is also below the national average. Similarly, in states with higher home values than the national median, mortgage debt also tends to be higher than average. Here is a look at the states where people are struggling with the most debt.
High real estate values also make it more likely that homebuyers will need to take out a mortgage in the first place. In nine of the 10 states with the highest median home value, the share of homeowners with a mortgage exceeds the 61.7% share nationwide. Here is a look at the average cost of a home in every state.
Depending on the state, average debt ranges from as little as $128,000 to nearly $400,000.
Click here to see the states with the most mortgage debt
Click here to read our detailed methodology
Sponsored: Find a Qualified Financial Advisor
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.