Coloradans have a mile-high debt problem. Here’s why.

Colorado has a reputation for being one of the most physically fit states in the U.S., but a recent study by Forbes Advisor has found that it also has the highest household debt burden in the country. After analyzing data from the Federal Reserve Bank of New York’s Household Debt and Credit Report, Forbes Advisor reported that the average household debt in Colorado is $89,170, far surpassing the national average of $57,411.

The study also revealed that Colorado residents are carrying more debt relative to their incomes, with household debt representing 99.85% of household income, the highest burden of any state. Even after accounting for higher average wages in Colorado, the statistics show that the state’s residents are still carrying a heavier debt burden.

One of the main contributing factors to this high level of debt is the cost of living in Colorado. The state ranks among the highest in the nation for rent, transportation costs, annual income taxes, housing costs, home prices, mortgage payments, and food expenses. Additionally, Colorado has the fourth-highest median home price in the U.S., making mortgages a significant part of consumer debt.

Another possible factor contributing to Colorado’s heavy debt burden is the state’s high level of educational attainment. With 52.7% of adults in Colorado holding an associate’s degree or higher, student loans are now the second biggest debt category after mortgages. According to SoFi Learn, Colorado residents are carrying $28.5 billion in student loan debt, with an average burden of $36,822 per borrower.

The state’s demographic trends may also be playing a role in the high level of debt. Colorado has a younger population compared to other states, and with a surge in home prices during the pandemic, the rate of homeownership in the state has continued to rise. This means that a higher share of households in Colorado have bought homes more recently, often at some of the highest prices in the country, and have taken on larger mortgages to do so.

And it’s not just mortgages and student loans that are contributing to Colorado’s heavy debt burden. Consumer debt across every sector of the economy in the state is at alarmingly high levels, raising concerns about the potential impact on the state’s economy during the next downturn.

Despite the challenges posed by Colorado’s high debt burden, efforts are being made to address the issue. The state government and financial institutions are working to provide resources and support for residents struggling with debt, and initiatives are being developed to improve financial literacy and encourage responsible borrowing and spending habits.

Historically, Colorado has been known for its strong economy and high quality of life, attracting a steady influx of residents seeking opportunities and a healthy lifestyle. However, in recent years, the rising cost of living and the increasing debt burden have created new challenges for both residents and policymakers.

In conclusion, while Colorado may boast a physically fit population, the state’s heavy debt burden raises concerns about its fiscal fitness. As the state grapples with these challenges, it is essential for individuals and policymakers to work together to find sustainable solutions and ensure the long-term financial well-being of Colorado’s residents.

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