Young Americans have relatively little debt, but debt stress is very high. This is evidenced by the high rates of serious delinquency among young credit card and car loan owners.[6].
Consumer debt by ethnicity
American families of all ethnic backgrounds are in debt.Black and Native American households are more likely to have more debt relative to household assets and higher-interest debt[7].
Black and Hispanic households have higher levels of credit card debt than white households.
Black and Hispanic households tend to have lower levels of credit card debt than white households. They also typically have lower incomes, so they have fewer resources available to pay these debts.
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The median mortgage amount is $130,000 for white and Hispanic borrowers and $116,000 for black borrowers. However, focusing only on the median amount hides a deeper problem. Black, Hispanic, and Native American homeowners often face more expensive and riskier mortgages than white borrowers.[5].
Consumer debt by family structure
A study conducted by credit reporting agency Experian found that U.S. consumers with children have 14% to 51% more total debt than the national average.[9].
Credit card and personal loan debt balances increased significantly with the number of children. Student loan balances have remained relatively constant, suggesting that most people have paid off their education and student loans by the time they start having children.
The average parent credit score is slightly below the national average, suggesting that the family is paying average or above-average interest rates.
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Consumer Debt by State
Debt levels vary widely from state to state. California is the most indebted state, with the average resident carrying $84,050 in debt.
state | Total debt per person |
---|---|
arizona | $70,350 |
california | $84,050 |
florida | $58,610 |
illinois | $53,730 |
mummy | $46,680 |
new jersey | $64,820 |
nevada | $69,290 |
new york | $57,560 |
oh | $44,610 |
P.A. | $48,030 |
texas | $56,610 |
There are several notable trends and reasons behind the geographic variation in consumer debt in the United States.
Regional differences in income distribution
According to the U.S. Census Bureau, the median household income in the United States in 2021 was $70,784. This number is relatively stable compared to the 2020 median household income of $71,186.[9].
Median income varies across the four major regions of the United States. The West and Northeast regions had the highest median household incomes in 2021, at $79,430 and $77,472, respectively. The Midwest followed with $71,129, and the South had the lowest median household income at $63,368.[9].
The difference in median household income between the Northeast and West in 2021 was not statistically significant. This indicates that the income levels of these two regions were relatively similar. Additionally, none of the four regions saw a statistically significant change in median household income between 2020 and 2021.[9].
Variations in median household income by region reflect underlying economic and demographic factors. Factors such as educational attainment, employment opportunities, and industry composition can contribute to income inequality. Understanding these regional differences is critical for policymakers to address economic inequality and promote inclusive growth.
Stable cost of living and job market
For example, Hawaii claimed the top spot as the most expensive state in terms of cost of living[10]. This rising cost of living has led to high levels of consumer debt.
While New York City had the fifth highest cost of living in the nation, its residents had the highest disposable income.
States with more stable job markets and lower unemployment rates, such as the Midwest and Plains regions, tend to have lower levels of consumer debt.