While borrowers everywhere are feeling the crunch, they’re worse off in some states compared to others
Borrowers across the US are facing a tougher time paying off their homes as mortgage debts pile up and more people lose their jobs due to the economic downturn caused by the COVID-19 pandemic. However, a new report revealed that borrowers in some states are worse off compared to others.
A report from LendingTree showed that the average mortgage payment in Hawaii, California, and New York is $1,684 – a whopping $525 more than the national average of $1,159.
Meanwhile, the top three states where mortgage payments are the least expensive were Iowa, Indiana, and Arkansas. The average monthly mortgage payment in these states is $978, or $706 less than the costs in the top three most expensive states and lower than the national average by $181.
The report also showed that, in the states of Hawaii, Mississippi, and Idaho, the average monthly mortgage payment is highest relative to the average household income, with borrowers in these states allocating an average 18.9% of their total monthly income to pay off their mortgages – 2.5% higher than the national average of 16.4%.
On the other end of the spectrum, mortgage costs amounted to only 13.2% of the average monthly household income in Connecticut, New Hampshire, and Minnesota – the lowest ratio of mortgage payment-to-income in the US.
“Borrowers in states with the highest relative mortgage payments will likely struggle the most in the wake of COVID-19, as homeowners lose their jobs and see their incomes reduced dramatically,” LendingTree Chief Economist Tendayi Kapfidze wrote in a blog post.
