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Debt in America: States Where Mortgage Debt is Declining

Americans aren't just paying off their credit cards. They're making real progress in paying down their home mortgages too.

Where consumers had been using their residences as personal piggy-banks, shaking equity out to buy everything from cars to construction in the late 2000s, they're now depositing cash back into their real estate, according to data provided by Credit Karma, a site that provides free credit scores.

(Note to readers: This is part of a four-part series on debt, you can read the entire report starting here.)
Part of the shift is a practical one, says Kenneth Lin, Credit Karma's president. With home prices falling sharply in many states, many consumers simply can't borrow against home equity today. Indeed, other surveys indicate that nearly half of homeowners have no equity in their homes at all.

Many homeowners also walked away from their under-water mortgages over the past two years, which has some bearing on the statistics, says Lin. But that trend appears to be abating. TransUnion, a Chicago-based credit bureau, reports that mortgage delinquencies have declined for the past five quarters in a row -- an indicator that fewer people are on the road to foreclosure. The company expects the trend to continue both because banks have become increasingly conservative about who gets loans and because consumers who have weathered the past two years of job losses and price declines are probably the best suited to continue shouldering their mortgage debts.

Where have consumers made the most progress in paying down their home loans?

State.............................avg mortgage now/year ago..........% change

1. Hawaii......................$298,562..../....$319,655...............-7%

2. Nevada.....................$195,080..../....$210,070..............-7%

3. Florida......................$163,422..../....$174,091.............-6%

4. Utah.........................$180,138..../....$190,127.............-5%

5. California*................$314,375..../....$327,275............-4%

5. Michigan*.................$123,794..../....$129,051............-4%

(*tie)

How are consumers faring with their other debts? Check out the other stories in this series:

Debt in America: Most & Least Indebted States
Debt in America: Credit Card Debt Plunging
Debt in America: Students Buried in Education Loans
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