Average Debt-to-Income Ratio by State
Debt-to-income ratios vary significantly across the United States, driven by differences in housing costs, median incomes, student debt levels, and cost of living. Understanding where your state falls can help contextualize your own DTI.
National Average
The average American household DTI is approximately 30-35%, based on Federal Reserve data on household debt service ratios. However, this varies dramatically by state, age group, and income level.
States with the Highest Average DTI
States with high housing costs relative to income tend to have the highest DTI ratios:
| State | Avg DTI | Primary Driver |
|---|---|---|
| Hawaii | ~42% | Extreme housing costs |
| California | ~40% | High housing + cost of living |
| New York | ~38% | NYC metro housing costs |
| New Jersey | ~37% | High property taxes + housing |
| Massachusetts | ~37% | Boston metro housing costs |
| Colorado | ~36% | Rapidly rising housing costs |
| Washington | ~36% | Seattle metro housing costs |
| Oregon | ~35% | Portland metro + housing growth |
| Maryland | ~35% | DC metro housing spillover |
| Connecticut | ~35% | High property taxes |
States with the Lowest Average DTI
States with affordable housing and lower cost of living enjoy lower average DTI ratios:
| State | Avg DTI | Primary Driver |
|---|---|---|
| West Virginia | ~24% | Very low housing costs |
| Mississippi | ~25% | Low cost of living |
| Arkansas | ~26% | Affordable housing |
| Oklahoma | ~26% | Low housing + energy costs |
| Kentucky | ~27% | Affordable housing market |
| Alabama | ~27% | Low cost of living |
| Iowa | ~27% | Affordable housing + strong income |
| Indiana | ~28% | Low housing costs |
| Kansas | ~28% | Affordable housing market |
| Ohio | ~28% | Low-moderate housing costs |
Factors That Influence State DTI Averages
- Housing costs: The single biggest factor. States with median home prices 5x+ median income have higher DTIs.
- Median household income: Higher income helps offset debt, but high-income states often have correspondingly high housing costs.
- Student loan debt: States with more college graduates tend to carry more student debt.
- Auto dependency: Rural states may have higher auto loan debt per household.
- Property taxes: States like New Jersey and Connecticut have high property tax burdens that increase housing DTI.
How to Use This Data
State averages are useful for context but remember: lenders evaluate your individual DTI, not your state's average. A 35% DTI in Mississippi and a 35% DTI in California are treated identically by most national lenders. Focus on getting your personal DTI as low as possible before applying for credit.