Mortgage Debt Is Rising the Fastest in These Surprising States

Americans have never owed more on their homes. With interest rates and home prices climbing steadily for years, mortgage debt has become the defining financial burden of a generation—and new data shows just how heavy that load has become.

Surprisingly, the states where that debt is growing fastest aren't coastal hot spots like California or New York—they're such places as Alaska, Delaware, and even Kentucky and Alabama.

Currently, mortgage debt is by far the biggest category of debt for Americans, with the average household owing about $109,000 and our total balance reaching $13.2 trillion, according to WalletHub. The personal finance site ranked all 50 states' increase in mortgage debt from the third quarter to the fourth quarter of 2025.

By contrast, even Americans' love of the credit card seems pale in comparison, with the average household owing $11,507 for a total of $1.39 trillion.

"Mortgage rates are the highest they’ve been in around a decade [now at 6.20%], and home prices have seen a meteoric rise in recent years as well," says WalletHub editor John Kiernan. "Even small increases in home prices can lead to thousands of dollars in extra mortgage interest costs for homeowners."

While that doesn't automatically translate into foreclosure, it does raise vulnerability, adds WalletHub analyst Chip Lupo.

"When more income goes toward housing and borrowing costs keep rising, homeowners have less room to absorb shocks like job loss, higher taxes, or unexpected expenses," he says.

Is mortgage debt still 'good'?

Traditionally, mortgage debt, along with school loans, has been considered "good debt"—a relatively low-rate loan that presumably will pay off big-time in the long run. Is this still the case?

"Mortgage debt has historically been viewed as 'good debt' because it builds long-term equity, but the current data suggests that assumption is becoming more conditional," says Lupo.

"Having a large mortgage only works if you can comfortably afford it, which typically means incomes made by very high earners," says Coldwell Banker broker Cara Ameer, who represents buyers and sellers in the costly Golden State as well as Florida.

"They key today is more the interest rate than anything else, so working through ways with the lender to determine an interest rate buy-down concession may help mitigate the cost of the payment."

But Miltiadis Kastanis of Compass in No. 11–ranked Florida, which just missed coming in the top 10, tells Realtor.com: "We are seeing a mix of finance- and tech-driven buyers who are comfortable using leverage strategically, alongside more traditional buyers who are feeling the pressure of higher prices and rates at the same time."

Good debt or not, affordable or not, he says that financial prudence still wins the day.

"We are advising clients to stay liquid and not max out, even if they can technically afford it," he says.

And Martin Orefice of Rent to Own Labs based in Orlando says not all mortgage debt is a sign of strong housing trends but rather homeowners needing help with rising costs.

"Folks are tapping their home equity to make ends meet as prices rise and the economy tips closer to recession," he says.

States that added the most debt

Alaska is a surprise at No. 1. It added the most in mortgage debt in percentage terms, with the average balance rising by 2.52% to $248,013.

"While this may not seem like a large increase, it’s a lot when you consider the fact that only two states had an increase above 2%," says Kiernan.

Alaska residents still carry significant mortgage balances in general. The average monthly payments of $2,078 give it a No. 17 rank in terms of total balance and monthly payments. So what is happening in Alaska?

"Alaska topping the list is definitely notable, but the data alone doesn’t point to a single clear explanation like population shifts or migration patterns," notes Lupo. "It’s less about big migration and more about a tight, high-cost housing environment where even incremental price changes translate into noticeable mortgage debt growth."

Realtor.com® senior economist Joel Berner points out that the state's home prices are rising faster than the national metric, which may have something to do with the increase in debt.

"I suspect that being among the smallest states in terms of owner-occupied households has something to do with Alaska coming to the top of these results," he says.

Second-ranked Delaware saw a 2.51% increase, which brought the average balance in the state to $210,542, with an average of $1,689 in monthly payments, quite a bit less than Alaska.

Coastal Maine came in No. 3 with its average mortgage balance rising by 1.98%, enough to bring it in near the top of the country but still much lower than the increases seen in the top two states.

Other surprises in the top 10 include lower-cost states such as Kentucky, Arkansas, and Alabama. But Lupo says that doesn't mean those Southern states have become more expensive.

"Kentucky and Alabama both rank high in terms of the recent mortgage debt increase (6th and 8th), yet they still sit near the bottom in terms of mortgage burden levels," he says.

California, with a median price tag of $736,550, ranks No. 1 for average mortgage balance combined with monthly payments.

But it was ranked low (No. 33) for most added debt, showing that there are not significant amounts of people taking on new mortgage debt in the state.

Here are the top 10 states that added the most mortgage debt from the third quarter to the fourth quarter of 2025, in order of rank:

Alaska

Median home list price: $433,000

Average percentage increase in mortgage debt: 2.25%

Delaware

Median home list price: $499,450

Average percentage increase in mortgage debt: 2.21%

Maine

Median home list price: $432,425

Average percentage increase in mortgage debt: 1.98%

Nevada

Median home list price: $485,000

Average percentage increase in mortgage debt: 1.18%

South Carolina

Median home list price: $359,940

Average percentage increase in mortgage debt: 1.18%

Kentucky

Median home list price: $299,250

Average percentage increase in mortgage debt: 1.02%

Arkansas

Median home list price: $314,500

Average percentage increase in mortgage debt: 0.91%

Alabama

Median home list price: $333,675

Average percentage increase in mortgage debt: 0.76%

Montana

Median home list price: $624,900

Average percentage increase in mortgage debt: 0.74%

Indiana

Median home list price: $292,500

Average percentage increase in mortgage debt: 0.70%