Mortgage debt balloons amid rising home prices

Mortgage debt has ballooned by 80% over the past 20 years, resulting in an unprecedented level of household debt among Americans.

That’s according to a new study from debt collection agency The Kaplan Group that examines debt across many types of loans and U.S. states. While mortgage debt accounts for 74% of all household debt, student and auto loans each make up 11%, and credit cards comprise 7%.

“The most striking finding is the substantial increase in total household debt, which has grown by 81.5% over the past two decades,” Dean Kaplan, CEO of Kaplan Group, told HousingWire. “This significant rise underscores the escalating financial pressures on American families.”

Chart courtesy of The Kaplan Group

There’s no secret as to why mortgage debt is increasing. The rapidly rising cost of homes, particularly since the beginning of the COVID-19 pandemic, has led to higher levels of mortgage debt than ever before. Kaplan’s numbers show a clear acceleration in the volume of mortgage debt since 2020.

The residents of the District of Columbia have the highest average level of outstanding mortgage debt at $79,730 per inhabitant. 

“Data indicate that DC has significantly higher levels of student loan debt compared to the average, which could be due to high education costs and a large number of residents with higher education degrees,” Kaplan reported. “Additionally, credit card debt in DC is also higher than the average, which could be influenced by the high cost of living and possibly lower average incomes.”

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Chart courtesy of The Kaplan Group

Rounding out the states where residents have the most mortgage debt are Colorado ($70,790), California ($67,840), Washington ($64,750), and Hawaii ($63,620).

The states with the least amount of mortgage debt tend to be more rural states in the South and Southeast that have more affordable housing. West Virginia has the least amount of mortgage debt at only $19,610 per inhabitant. That’s particularly interesting because according to Property Shark, West Virginia has the highest homeownership rate in the country at about 75%. 

Rounding out the states with the lowest levels mortgage debt per person are Mississippi ($20,750), Arkansas ($24,000), Oklahoma ($24,730), and Kentucky ($25,275).

While mortgage debt makes up the bulk of the four types of debt examined by the student, it’s not the fastest-growing segment. That ignominious distinction belongs to student loan debt, which over the past 20 years has risen by a whopping 430%.

Auto loans are also outpacing mortgage debt, having risen by 91% since 2003.

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