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Report: Less mortgage debt means Illinoisans have less personal debt than national average

By Cole Lauterbach

CHICAGO – While Illinoisans have long made more than the average American and have more credit card debt to show for it, a new analysis found Illinoisans now have less total debt than people in other states, and mortgages could be the culprit.

The Commission on Government Forecasting and Accountability’s report on the state’s tax receipts also examined the total private debt held by the state’s residents. Using data from the Federal Reserve of New York and credit monitoring company Equifax, COGFA found that Illinoisans’ shoulder “$3,800, or 7.4%, less than the national average of $51,180 of consumer debt per capita.”

“Illinois’ slow economic recovery from the Great Recession, the fiscal instability of state government in recent years, a lagging housing market, along with an aging and declining population has likely created the impression of a fragile economic environment,” the report said. “These stated reasons, and likely others, may be contributing to Illinois residents being hesitant to take on more debt.”

It’s not that Illinoisans have lower credit card balances than those in other states. A recent report from Wallethub showed Illinois’ average credit card debt per capita to be the fifth-highest in the nation. 

The primary reason is mortgage debt. 

“Since the Great Recession, we’ve seen an increase in debt from the rest of the country where Illinois just really hasn’t taken on that mortgage debt,” said Benjamin Varner, a senior revenue analyst with COGFA. “We saw a similar thing with auto debt.”

In fact, Illinoisans took on only an additional $670 in mortgage debt per capita, while the U.S. as a whole has added about $3,100 since the beginning of 2014, according to the report.

Varner said it could be that Illinoisans learned from the last economic downturn, leading to a conscious decision to take on less debt. 

“Some theories we had were the difficulties Illinois has had coming out of the Great Recession,” he said, “our economy lagging a little bit, our housing market lagging a bit, and our aging population,  maybe Illinoisans just aren’t taking on big purchases such as new houses or new cars.” 

Cole Lauterbach reports on Illinois government and statewide issues for The Center Square. He has produced radio shows for stations in Bloomington/Normal and Peoria, and created award-winning programs for Comcast SportsNet Chicago.

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