Report Compares Hawaiʻi Consumer Debt with Rest of Nation

A report released today by the Department of Business, Economic Development and Tourism called, “An Analysis of Consumer Debt: How does Hawaiʻi Compare with the Nation?” examines various consumer debt categories and shows where Hawaiʻi ranks with the rest of the US.

Big Island Now stock photo.

The report says the high per capita debt is due to the high housing prices in Hawaiʻi and that 77% of consumers debt comes from mortgage debt.

The report shows that Hawaiʻi’s home ownership increased 10 percentage points from 46.9% in 1970 to 56.9% in 2015, while US home ownership increased less than one percentage point from 62.9% to 63.8% during the same time period.

Chief State Economist Dr. Eugene Tian noted that the high mortgage debt may also have negative impacts, including less consumers spending on other goods and services by home owners, increasing rental payment for renters, and the leakage of mortgage payment to out-of-state financial institutions.

Below are some of the highlights of the report:

· Hawaiʻi’s total consumer debt per capita increased from $51,810 in 2005 to $67,010 in 2015, ranking it second highest in the nation.
· For mortgage debt per capita, Hawaiʻi has been steadily increasing in the state rankings, from the sixth highest state in 2005 to the highest state in 2015.
· Hawaiʻi ranks low among states for auto loans per capita, while defaults for those with auto loans are close to US average.
· Hawaiʻi residents have relatively high credit card debt. Hawaivi ranked fourth in the nation in 2010 and 2015 for credit card debt per capita.
· Hawaiʻi ranks the lowest in the nation for per capita student debt.
· For the other debt category (home equity lines of credit, consumer cards, and consumer-financed debt), Hawaiʻi leads the nation for the average amount per capita at $5,300. The report notes that this partially reflects Hawaiʻi’s high residential real estate values and the home equity loan balances supported by these high values.

The full report is available here.