The population of Texas has grown rapidly over the past few years

Texas: Over the last several years, Texas’ population has been expanding, with hundreds of thousands of newcomers drawn by the state’s expanding employment market and reasonably priced homes.

However, a recent survey by online marketplace LendingTree found that three of the largest cities in the Lone Star State—Austin, San Antonio, and Houston—were the most indebted in the nation.

According to a review of the anonymized credit records of over 210,000 LendingTree customers between April 1, 2024, and June 30, 2024, Austin had $45,920 in non-mortgage debt, the highest amount in the country. This includes credit card balances, school loan debt, personal loan debt, vehicle loan debt, and other debt.

In contrast, the average non-mortgage debt for those living in the nation’s 50 biggest cities was $37,827.

In addition, the Texas capital had the fifth-highest average personal loan debt ($4,638) and the second-highest average vehicle loan debt ($17,144), behind San Antonio ($18,303).

With an average of $44,812 in non-mortgage debt, San Antonians were the second most indebted city in the nation, behind Austin. Houston came in second with $44,640 on average.

After Miami and Atlanta, Dallas has the sixth-highest amount of non-mortgage debt in the nation, placing it in the top ten. The city’s average non-mortgage debt was $43,901, which is still more than the national average.

Why Does Texas Have Such High Non-Mortgage Debt?

“Auto loan debt is a huge reason why Texas cities have such high non-mortgage debt,” Matt Schulz, chief credit analyst at LendingTree, told the media report. “Of the cities we examined, San Antonio, Austin, and Houston had the highest average vehicle loan debt, with Dallas following closely after.

“The fact is that in order to navigate Texas’ largest cities, you often need a car. Given the exorbitant car and loan rates of today, that puts many Texans in a difficult situation.

“Auto loan debt is the biggest contributor,” Schulz said, while other factors also play a significant role in the high amount of non-mortgage debt, given that these towns score well for other forms of debt.

What About Debt from Mortgages?

Despite the fact that property is reasonably priced, a recent LendingTree research revealed that Texans spend an average of $2,182 in mortgage payments each month, which is 16th in the US. According to Schulz, it is above average but still well behind some of the other largest states in the US.

“As someone who has lived in Texas for most of the past 40 years, I can tell you that while housing is still relatively affordable, it certainly isn’t inexpensive everywhere,” he said. “My hometown of Austin, in particular, has seen housing prices skyrocket as people have moved into the state in droves.”

There are property taxes in addition to the cost of dwelling for Texans. Although there is no state property tax in Texas, local governments still collect property taxes for public services like roads, schools, police, and firemen.

The typical Texan paid a projected $3,872 in property taxes, making the state the sixth most expensive in the nation, according to WalletHub’s 2024 property tax study.

Didn’t Texas’s affordability contribute to its boom?

Texas will become the biggest state in the country by 2045, according to the media report analysis that predicted the state’s population will continue to increase at a rapid pace due to favorable weather, employment, and inexpensive housing.

Despite emphasizing the state’s allure, the research noted that due to its comparatively low salaries, Texas may be more inexpensive for visitors from outside the state than for locals. Nearly one-third of Texas’s workforce, or 4.5 million people, make less than $17 per hour, making the state one of the states with the largest percentage of low-wage workers, according to recent Oxfam research.

The federal minimum hourly pay of $7.25 is still in effect in 20 states, including Texas; 23 additional states are planning to raise their minimum wages this year.

“While Texas has been booming in recent years, salaries are still generally lower than those found in the biggest American cities, especially those along the coasts,” Schulz said.

This is particularly evident in San Antonio, one of the most impoverished major cities in the United States. Even though San Antonio has one of the lowest costs of living among the largest cities in the United States, the lack of money nevertheless poses significant difficulties. It implies that there is less money available for spending on a vehicle purchase. More dependence on credit cards to make ends meet might result from it. It can indicate a greater demand for personal loans.

According to Schulz, Texans also often have poorer credit ratings.

“That means fewer borrowing options, but it also means that if they’re able to get a loan, they’re likely to face higher interest rates and other costs,” he said. “That’s a big deal.”