This story is part of The Salt Lake Tribune’s ongoing commitment to identify solutions to Utah’s biggest challenges through the work of the Innovation Lab.

[Subscribe to our newsletter here]

A recent study found Utah households may be the most indebted in the nation but notes a potential flaw in its own data.

The study published by the Cultural Currents Institute earlier this month found the average household in the Beehive State owes 138% of the state’s average annual salary.

But it also notes the data “is limited in that it only examines average salary, not average household income.”

Phil Dean, chief economist at the Kem C. Gardner Policy Institute and a former state budget director, called using the average salary “a little bit weird.”

There’s something meaningful in the data, Dean said, just not what CCI found.

He said the study is “directionally correct” in that Utah is on the higher end — largely because of high housing costs and a younger population than other states.

But comparing household debt to average salary instead of household income is “quite odd,” he said. People don’t always pay off debt with one salary, he said, and household income includes more than wages.

Eighth when comparing to household income

Using data from the Federal Reserve Bank of New York and the U.S. Census Bureau, The Salt Lake Tribune compared Utah’s consumer debt to its median household income.

That analysis found Utah, along with other western states, has a debt-to-household-income ratio above the national average. But it didn’t find the Beehive State had the highest ratio.

Utah households owe about 89% of their median income in debt, according to The Tribune’s analysis. That debt isn’t all immediately due, since it includes mortgage payments, car loans and other long-term debt.

That ratio of 0.89 is based on an average total debt of $79,240 and a median household income of $89,168. The study by CCI used an average salary of $57,360 based on data from Forbes.

Utah’s ratio is higher than the average of 0.77 and ties with Hawaii for the eighth-highest debt-to-income ratio, The Tribune found.

Arkansas households are the most indebted in the nation based on an average debt of $65,600 and a median household salary of $55,432 — or a debt-to-income ratio of 1.18.

In contrast, households in Alaska and Arizona are the least indebted, owing 50% and 53%, respectively, of the median household income in various kinds of debt.

That placement matches CCI’s findings, but that study found both states had a debt-to-salary ratio of 0.67.

Utahns have growing consumer debt

Utah does have one of the highest average household debts in the country — and that number has been growing.

Average personal debt in Utah grew 119% between the end of 2003 and the end of 2022, according to data from the Federal Reserve.

It also grew 54.8% over a decade — between 2012 and 2022 — and increased 12.5% since 2019 and 10.2% since 2021.

The most overall growth has been in student loan debt, which increased 441% from 2003 to 2022 despite a 3% decrease between the end of 2021 and 2022.

But student loans are a small portion of personal debt — less than 6%.

Mortgages make up the largest chunk at 77.1%, followed by car loans, student loans, and credit card debt.

Though Utahns’ consumer debt is growing, they have low delinquency rates — the lowest of any state for car loans and mortgages, the second lowest for credit cart debt and the third lowest for student loans.

Need help with debt?

Utah’s Division of Consumer Protection has information about credit reports and repair, debt collection and more at dcp.utah.gov/education.

The United States Department of Justice has information on credit counseling agencies that work with Utahns at justice.gov/ust/credit-counseling-by-state/Utah.

Megan Banta is The Salt Lake Tribune’s data enterprise reporter, a philanthropically supported position. The Tribune retains control over all editorial decisions.