According to a new LendingTree study, the typical urban millennial carries $23,064 of debt living in the biggest US cities. Student loans, auto loans, and credit card debt are the most popular forms of consumer debt (excluding mortgages) for Millennials.
“The millennial generation makes up the younger portion of adults, and as they build their careers, families and communities, they’re doing it encumbered by personal debt,” said Kali McFadden, the LendingTree senior research analyst who administered the study.
LendingTree analyst examined anonymized credit card report data from My LendingTree users who live in US metros. They looked at debt balances (excluding mortgages) for those born between 1981 and 1996, and determined a shocking revelation:
- Millennials have the biggest non-mortgage median debt obligations
- The average breakdown of debt obligations by five different debt types: student, auto, credit cards, personal loans and other
The results provided a stunning snapshot of millennials’ debt balances, along with geographical data.
Here are some of the key findings from the report:
- Millennials in San Antonio, Pittsburgh, and Austin, Texas, shoulder the largest debt burdens of the 50 biggest metro areas, with median non-mortgage debts of $27,122, $26,403 and $26,164, respectively.
- Three California cities — San Jose, Sacramento and Los Angeles — have the lowest median balances on our list at $18,376, $18,691 and $19,299, respectively.
- Student debt makes up the largest share of millennial debt, accounting for 40% of their total credit and loan balances. The proportion of student debt was highest in Philadelphia, at 49.1% of the average debt burden, and lowest in San Jose at 24.1%. This was also the largest debt category for millennials in 35 of the 50 cities we reviewed.
- Auto loan debt was the biggest debt burden of the other 15 metros and averaged about 33% of millennials’ average total debt balances. Auto loans accounted for over 43% of the average debt for millennials in Riverside, Calif., and San Antonio, but just over 22% of New York City millennials’ debt.
The follow map breaks down where Millennials carry the most debt (excluding mortgages)
The report reveals that Millennials in the South and Rust Belt regions appear to be borrowing the most – 80% of the cities are in these areas. Texas, in particular, is number one on the list. If you are a millennial living in San Antonio, Austin, Houston, and or Dallas — you are most likely broke and heavily indebted.
Half of the millennials in these cities have outstanding debts totaling $25,000 or more (not including mortgages). And 25 percent of millennials in these cities owe lenders more than $50,000.
The composition of these debts was similar to the national average, with student debt and auto loans accounting for a majority of millennials’ outstanding credit balances.
Here is the list of cities where millennials are entirely broke:
Another part of the studied looked at 10 cities where millennials have the lowest debts. The report notes that several of the nation’s most expensive cities, such as San Jose, Los Angeles and New York City, are where millennials owe the least
“It’s worth noting that low debt burdens aren’t necessarily a good thing when thinking about the economic vibrancy of a community,” McFadden pointed out.
“Some people have lower debt burdens because they don’t have access to credit, for instance, or haven’t completed college,” she said.
McFadden added that a lack of debt in some cities is a troubling sign that millennials cannot afford or cannot qualify to expand credit.
Here is the list of cities where millennials have less debt:
And now it all makes sense, millennials are coming to age as America’s most stressed generation because of the massive debt loads they have incurred. What happens next is horrifying, as they will be the next generation to deleverage in the upcoming economic downturn.