Mortgage debt continues to dominate American household finances, with the average balance nearing $105,000 and total national mortgage debt exceeding $12.6 trillion. As interest rates remain high and home prices climb, new data reveals which states are adding the most mortgage debt.
Vermont leads the nation in mortgage debt growth
According to WalletHub’s latest report, Vermont saw the largest percentage increase in mortgage debt from the third to fourth quarter of 2024. The average mortgage balance in Vermont rose by 2.63%, reaching $208,730. This jump is significant, as no other state recorded an increase above 2%. In fact, nearly half of all states reported declining mortgage balances during the same period.
Vermont homeowners now face an average monthly mortgage payment of $1,666, alongside some of the country’s highest property tax rates.
Delaware and Massachusetts follow closely
Delaware posted the second-highest mortgage debt growth, with balances rising by 1.65% to an average of $203,487. The typical monthly payment for a Delaware homeowner is now about $1,611. Despite the debt growth, Delaware residents saw some relief elsewhere, with personal loan debt dropping over 8% year-over-year.
Massachusetts ranked third in mortgage debt growth. Although the percentage increase was a modest 0.97%, the average mortgage balance surged to $302,242—the third-highest in the nation. Monthly mortgage payments in Massachusetts average $2,380, making it one of the most expensive states for homeowners despite relatively strong affordability overall.
Other high-growth states
Several other states showed notable increases in mortgage debt:
- Minnesota: Ranked fourth, with steady balance growth and moderate payments.
- Hawaii: Fifth overall, where the average mortgage balance is among the nation’s highest.
- Arkansas: Surprisingly ranked sixth, with a lower average mortgage but a significant percentage increase.
States like California, Maine, Washington, and Colorado also appeared in the top 10, underscoring the nationwide spread of mortgage debt pressures.
Why mortgage debt is rising
Higher home prices and surging mortgage rates are driving the increase. Even modest gains in home values lead to thousands of dollars in additional mortgage costs over time, according to WalletHub’s John Kiernan.
“Mortgage rates are the highest they’ve been in around a decade,” Kiernan said. “Choosing where and when to buy a home has never been more critical for financial stability.”
Tips for managing mortgage debt
WalletHub also provided several strategies for homeowners looking to pay down their mortgages faster:
- Make extra payments toward the principal whenever possible.
- Switch to biweekly payments to add an extra full payment each year.
- Use financial windfalls, such as tax refunds, to make lump-sum payments.
- Consider refinancing if lower interest rates become available.
- Review and trim budgets to reallocate funds toward mortgage reduction.
Full rankings
Here are the top five states adding the most mortgage debt between Q3 and Q4 2024:
- Vermont
- Delaware
- Massachusetts
- Minnesota
- Hawaii
Meanwhile, states like Kansas, West Virginia, and Nebraska reported the smallest increases—or even decreases—in mortgage debt.
For a complete state-by-state breakdown, you can view WalletHub’s full report.
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