There are good debts and bad debts. Loans used to pay housing mortgages are often seen as good debts, as they build personal wealth by helping you afford a home, which then builds your real estate assets.
That said, the United States has trillions in housing debts. According to a recent WalletHub report, the U.S. has more than $12 trillion in total mortgage debt.
How much each state carries in household debt varies.
States with the most mortgage debt:
- Maryland.
- Hawaii.
- Nevada.
- Texas.
- Arizona.
States with the least mortgage debt:
- Vermont.
- Delaware.
- Wyoming.
- Connecticut.
- Montana.
Utah ranked as the 14th highest state in mortgage debt in 2023, according to WalletHub.
Mortgage rates’ historic highs
For those who follow the housing market, the news of America’s trillion-dollar household debt may not come as a shock because mortgage rates have reached historically high levels in recent years.
In fact, “Mortgage rates are the highest they’ve been in around a decade, and home prices have seen a meteoric rise in recent years as well,” WalletHub Editor John Kiernan said, per the report.
“Even small increases in home prices can lead to thousands of dollars in extra mortgage interest costs for homeowners, so it’s important to choose wisely when deciding where and when to buy a house,” he added.
At the beginning of 2024, the average mortgage debt owed per household was more than $241,000, according to Bankrate, which is a 4% increase from two years ago. With the current 30-year fixed rate mortgage at 6.87%, getting a loan may not seem so attractive.
“The average 30-year mortgage rate in the U.S., which was below 3% until late 2021, peaked at 7.79% in late October 2023,” per U.S. Bank. “That represented the highest mortgage rate since November 2000. The result is more costly borrowing, which can dampen housing market activity. Rates declined from October’s peaks, but are still close to 7%.”
How to manage current mortgage debts
According to Chase Bank, the best but not always the most possible way to manage mortgage payments is to pay them on time. “As long as you continue making your monthly mortgage payments on time, you’ll be in good standing with your lender. This prevents you from accruing fees or risking foreclosure.”
If paying your debt on time every month is not an option, Chase Bank advised the following options:
- Only spend what is absolutely necessary on your home — spend money on decorating later.
- Understand and review your mortgage statements to ensure they’re error-free.
- Use emergency savings to cover unexpected housing costs.
- Pay extra on payments whenever possible.
FAQs
Average mortgage and HELOC debt in 2024
Data source: Experian (2024), Federal Reserve (2024), Freddie Mac (2024). Mortgages make up 70% of American consumer debt. That number has risen consistently since mid-2013 and has recently accelerated as home prices hit record levels.
Does a mortgage count as household debt? ›
Household debt relative to disposable income and GDP. Household debt can be defined in several ways, based on what types of debt are included. Common debt types include home mortgages, home equity loans, auto loans, student loans, and credit cards.
Why is US household debt so high? ›
It seems that auto loans and credit card balances are the main culprits. And what's more, the amount we are paying in interest on this debt — as a percentage of our income — has been moving up sharply. In just the final three months of last year, we added to our household debt $271 billion.
Why is housing debt so much higher than non-housing debt? ›
Housing debt is typically higher due to low interest rates, higher appreciation potential of housing, flexible lending practices like subprime and NINJA loans, and certain tax benefits. Added to these factors, a house is a tangible asset providing not only financial but also nonfinancial return.
What is the leading cause of debt in the United States? ›
The largest percentages of the average consumer debt balance are mortgages.
Who owns the largest percentage of the US national debt? ›
Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.
What is the average household debt excluding mortgages? ›
That breaks down into $241,815 on average in mortgage debt, and an average of $23,317 in non-mortgage debt (including credit card, student loan, auto loan and personal loan debt). But these debt balances vary greatly depending on age group.
Does a mortgage count as being in debt? ›
Is a mortgage considered debt? A mortgage is a type of secured debt because the real estate you're financing is used as collateral against the loan. Non-mortgage debt is any other type of debt that's not secured by real estate, such as personal loans, student loans, auto loans and credit cards.
Is mortgage included in debt ratio? ›
You may notice slight variations between different lenders' calculations of DTI, but generally, these amounts are considered debt: Monthly housing costs, including a mortgage, insurance, homeowners' association fees and property taxes. Rent payments. Home equity loans or lines of credit.
What contributes the most to the US debt? ›
Tax cuts, stimulus programs, increased government spending, and decreased tax revenue caused by widespread unemployment generally account for sharp rises in the national debt.
How Many Americans Are Living Paycheck to Paycheck? A 2023 survey conducted by Payroll.org highlighted that 78% of Americans live paycheck to paycheck, a 6% increase from the previous year.
Which country has the worst household debt? ›
With an overall Invezz debt score of 8.42 out of 10, Canada came out as the country on top with the highest debt followed by the UK in second spot with a score of 7.92 and the US in third place with a score of 7.75 out of 10.
What is the largest component of household debt? ›
Value of household debt in the U.S. 2023, by type
Consumers in the United States had over 16 trillion dollars in debt as of the third quarter of 2023. The majority of that debt were home mortgages, amounting to approximately 11.4 trillion U.S. dollars.
How many Americans are debt-free? ›
What percentage of America is debt-free? According to that same Experian study, less than 25% of American households are debt-free. This figure may be small for a variety of reasons, particularly because of the high number of home mortgages and auto loans many Americans have.
How much is the average person in debt? ›
The average personal debt per individual grew from $21,800 in 2023 to $22,713 in 2024, excluding mortgages, according to recent research from financial services company Northwestern Mutual.
What is the majority of the national debt? ›
At the end of September 2023, domestic creditors held 77 percent of the outstanding debt held by the public. Foreign creditors held the remaining 23 percent.
What is total mortgage debt in the US? ›
Mortgage balances shown on consumer credit reports increased by $190 billion during the first quarter of 2024 and stood at $12.44 trillion at the end of March.
Are home loans part of the national debt? ›
The national debt is the aggregate amount of money, plus interest, that the government owes its borrowers. The national debt is made up of several kinds of debt, just like an individual's debts might include credit card debt, a car payment, student loans and a mortgage.
What is the debt ratio to get a mortgage? ›
Most borrowers need a DTI of 43% or less to qualify for an FHA loan.
