Debt-to-income ratio of Iowa households averaged up to 1.33 in Q2

(The Center Square) – The median household debt-to-income ratio in Iowa during the second quarter of 2020 stood at 1.24 to 1.33, which is below the national average of 1.51, the Federal Reserve System reported recently.

During the second quarter of 2019, the debt-to-income ratio for Iowa was between 1.09 and 1.24.

The Fed sees such state household debt-to-income ratios as key to explaining the sluggish economic recovery in many regions in the wake of the Great Recession more than a decade ago. States or counties with high household debt relative to income endured drops in consumer spending and employment as the recession unfolded, the Fed reported.

In the Fed data, household debt numbers come from both Equifax and the Federal Reserve Bank of New York’s Consumer Credit Panel. The estimates of household income come from the U.S. Bureau of Labor Statistics.

A household’s debt-to-income ratio is defined as monthly debt payments divided by gross monthly income.

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Q2 2020 Debt-to-Income Ratios by State

StateDebt-to-Income Ratio Low (Q2 2020)Debt-to-Income Ratio High (Q2 2020)Debt-to-Income Ratio Low (Q2 2019)Debt-to-Income Ratio High (Q2 2019)Alabama1.511.621.411.51Alaska1.621.751.621.75Arizona1.751.891.751.89Arkansas1.331.411.241.33California1.751.891.751.89Colorado1.892.131.751.89Connecticut1.511.621.411.51Delaware1.751.891.511.62District of Columbia0.391.090.391.09Florida1.892.131.751.89Georgia1.621.751.511.62Hawaii2.13–2.13–Idaho1.892.131.892.13Illinois1.331.411.241.33Indiana1.411.511.241.33Iowa1.241.331.091.24Kansas1.091.241.091.24Kentucky1.241.331.091.24Louisiana1.511.621.411.51Maine1.751.891.621.75Maryland1.892.131.892.13Massachusetts1.331.411.241.33Michigan1.411.511.241.33Minnesota1.411.511.331.41Mississippi1.511.621.411.51Missouri1.331.411.241.33Montana1.892.131.751.89Nebraska1.241.331.091.24Nevada2.13–1.751.89New Hampshire1.751.891.621.75New Jersey1.621.751.511.62New Mexico1.621.751.511.62New York1.091.240.391.09North Carolina1.621.751.511.62North Dakota1.091.240.391.09Ohio1.241.331.091.24Oklahoma1.241.331.241.33Oregon1.751.891.621.75Pennsylvania1.331.411.241.33Rhode Island1.751.891.511.62South Carolina1.892.131.751.89South Dakota1.331.411.241.33Tennessee1.511.621.331.41Texas1.331.411.091.24Utah1.751.891.751.89Vermont1.511.621.411.51Virginia1.892.131.892.13Washington1.621.751.621.75West Virginia1.411.511.241.33Wisconsin1.241.331.241.33Wyoming1.621.751.511.62

Source: Federal Reserve System

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