Oh look, more bad news about the financial state of Hawaii residents. This shouldn’t surprise anyone reading this, but things are bad out there. Sure, unemployment’s very low, but for the most part the jobs that are available are low-paying. In fact, income levels for just about all jobs in Hawaii fall below the national averages.
On Feb. 27, the state Department of Business, Economic Development and Tourism (DBEDT) released a new report on consumer debt. Titled 2017 Quarterly Consumer Debt Report (exciting, I know), the report shows–to no one’s surprise–that debt is rising here faster than the nation as a whole.
“This report highlights why home equity lines of credit and home equity loans are more popular in Hawaii than the nation due to our high home prices,” said DBEDT Director Luis P. Salaveria in a Feb. 27 DBEDT news release. “We saw the number of accounts in these two types of financing methods increase, while the number of accounts in these two methods decreased for the U.S. between first and fourth quarter of 2017. The report also shows Hawaii’s delinquency rates were lower than the U.S. average for all the debt categories, which is encouraging.”
“Higher home prices.” And how. Credible Labs’ Feb. 15 report Burdened by Debt: The Best and Worst States at Managing Debt shows that the average monthly housing payment in Hawaii is $1,091 (one of the higher figures nationwide), while the average annual income is $56,889 (one of the lower figures). That’s a bad ratio, the results of which we can see in the latest Hawaii DBEDT report.
“Chief State Economist Dr. Eugene Tian noted that the highest growth in debt occurred in bankcard loans and personal loans for both Hawaii (9.4 percent and 7.1 percent, respectively), and the nation (9.8 percent and 9.6 percent, respectively) between the first and fourth quarter of 2017,” stated the Feb. 27 DBEDT news release. “The outstanding balance for home equity loans increased 7 percent in Hawaii but decreased 2.3 percent at the national level between the first and fourth quarter of 2017.”
The result of all this, according to DBEDT, is stunning: “Among the population with at least one credit line (scored population), the average debt per person was $64,642 for Hawaii, 46 percent, which is about $20,000 higher than the national average of $44,284 during the fourth quarter of 2017,” stated the DBEDT news release.
Put another way, Credible Labs’ findings show that “Residents of Hawaii spend, on average, 36.2% of their monthly paychecks on credit card, student loan, and housing payments—the highest percentage in the nation, and over 43% more than residents of Michigan.” While the average monthly credit card payment across the U.S. is $200, it’s $238 in Hawaii–one of the highest in the nation.
None of this is sustainable. But given Hawaii’s relatively high cost of living and low salaries, there’s no chance it’s stopping anytime soon.