Houstonians Take On More Debt
Houston is tops in the nation in yet another economic category...consumer debt growth. According to new data from the credit reporting service Equifax, Houston had the highest rate of consumer debt growth, 1.37 percent, during the past year among the nation's top 25 metropolitan areas. In fact, Houston was one of only three cities on the list, along with Dallas and Pittsburgh, to show an increase in personal debt. Nationwide, consumer debt fell by 2.28 percent over the past year.
The rise in borrowing by Houstonians is actually a positive sign for consumer confidence, according to Patrick Jankowski with the Greater Houston Partnership. "Consumers generally don't want to take on debt if they're worried about their job or their ability to pay off the debt," he tells KTRH. "But the fact they're willing to take on debt means they feel fairly confident that they're gonna have the income and the earning strength to retire (the debt.)" The rankings reflect the economic conditions in the individual markets, with those hardest hit by the recession and the housing crisis showing the sharpest decline in consumer debt. Las Vegas, Miami, and Sacramento were the top three in that category.
The other notable factor in the Equifax data was the overall levels of consumer debt. "Houston's got the lowest per-capita debt, followed by Miami and then Dallas," Jankowski says. "I think that's another sign of just how healthy the market is here and how healthy the economy is here." A big factor in that number is the housing market, with Houston showing the lowest decline in mortgage debt (.1 percent) among all metro areas. Jankowski notes that the overall low amount of debt in Houston could be the answer to why the city largely stayed above water during the economic downturn of the past five years. "It may be that Houstonians never really loaded up on debt, and that was one of the reasons why we didn't have the huge problems the rest of the nation did during the recession."
Click here to check out the latest Equifax consumer debt report.