NEW YORK—Consumers in North Dakota (+41.3%) have had the largest increases in debt-to-income ratio since 2013, while those living in the state of Washington have shown the greatest improvement (-19.2%), a new study reveals.
The study, conducted by crypto onramp platform Instaxchange.com, looked at data from the Federal Reserve regarding DTI ratios in each state for 2013 and 2023.
Top Ten States with the Largest Rise in Debt-to-Income Ratio
While only 12 states recorded an increase in their DTI ratio, North Dakota experienced the largest, with a 41.3% jump. In 2013, for every $1 earned, residents had $0.82 in debt. By 2023, this had risen to $1.16.
“Although this is a significant increase, North Dakota still maintains the second-lowest DTI ratio in the country, behind New York. The average consumer debt currently stands at $91,074, according to data from Experian. The average wage has risen by $10,700 since 2013, but average house prices - one of the largest contributors to personal debt - have increased by $40,415 in the last five years alone, leading to higher borrowing,” the report states.
Texas ranks second with a 17.2% increase in DTI. A decade ago, Texans had $1.15 of debt for every dollar earned, but by 2023, this figure had risen by 20 cents. According to Experian, by the third quarter of 2023, the average consumer debt in Texas reached $95,537. Wages have grown by $15,300 since 2013.
“However, other metrics have gone up. The average house price in Texas has risen $90,372 in the last five years according to Zillow data, and a rise of $15,300 in wages in the last decade is not enough to cover the extra money,” the report states.
Top Ten States with the Largest Decrease in Debt-to-income Ratio
“While it is encouraging to see the debt-to-income ratio fall in most states, the study highlights areas where consumer debt has outpaced income growth, particularly in places like North Dakota and Texas,” said Gabriele Asaro, head of SEO and research at Instaxchange.com. “This trend could be due to several factors. For instance, the soaring cost-of-living and house prices post-pandemic leading to increased borrowing. Additionally, wages may not have risen as much as expected, causing the debt-to-income ratio to inflate, even if people aren’t necessarily borrowing significantly more.”