15 Cities With the Highest Debt-to-Income Ratios in 2022

Woman with a lot of credit card debt
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Editor's Note: This story originally appeared on Construction Coverage.

For much of the COVID-19 pandemic, favorable financial conditions for many middle and upper-income households have brought a rush of new homebuyers into the real estate market.

In 2020 and 2021, increased savings rates and government stimulus allowed millions of people to pay down debts from credit cards, student loans, and other consumer borrowing, while more recently, a tight labor market has helped boost wages. Both of these factors have helped prospective homebuyers improve on one of the key metrics that mortgage lenders consider when evaluating mortgage applications: the debt-to-income ratio.

The debt-to-income ratio is calculated as an individual’s monthly debt payments divided by their monthly income. As regular debt payments increase relative to income, an individual’s ability to pay debts while also covering their other expenses becomes more challenging. For that reason, lenders evaluate debt-to-income ratios when approving loan applicants to ensure that borrowers will be able to make payments reliably.

Debt-to-income ratio is especially important for mortgage approvals. According to data from the Home Mortgage Disclosure Act, 31.2% of mortgage applications are denied due to the applicant’s debt-to-income ratio.

To determine the locations with the highest debt-to-income ratios, researchers at Construction Coverage calculated the share of home purchase loans with a debt-to-income ratio of more than 36%. In the event of a tie, the location with the higher share of home purchase loans with a debt-to-income ratio of more than 43% was ranked higher.

The data used in this analysis is from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. Only conventional, home purchase loans originated in 2020 were considered.

Here are the metropolitan areas with the highest debt-to-income ratios (DTI).

15. Seattle-Tacoma-Bellevue, WA

Seattle, Washington
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  • Share of home purchase loans with >36% DTI: 48.9%
  • Share of home purchase loans with >43% DTI: 19.2%
  • Home purchase loan approval rate for >36% DTI: 89.4%
  • Home purchase loan approval rate for >43% DTI: 81.4%
  • Home purchase loan approval rate for all loans: 92.1%
  • Median interest rate across all home purchase loans: 3.13%

14. Phoenix-Mesa-Chandler, AZ

Phoenix, Arizona
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  • Share of home purchase loans with >36% DTI: 49.3%
  • Share of home purchase loans with >43% DTI: 19.7%
  • Home purchase loan approval rate for >36% DTI: 89.0%
  • Home purchase loan approval rate for >43% DTI: 81.7%
  • Home purchase loan approval rate for all loans: 91.3%
  • Median interest rate across all home purchase loans: 3.25%

13. San Antonio-New Braunfels, TX

San Antonio, Texas outdoors
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  • Share of home purchase loans with >36% DTI: 49.7%
  • Share of home purchase loans with >43% DTI: 21.7%
  • Home purchase loan approval rate for >36% DTI: 75.6%
  • Home purchase loan approval rate for >43% DTI: 62.6%
  • Home purchase loan approval rate for all loans: 81.4%
  • Median interest rate across all home purchase loans: 3.25%

12. Tampa-St. Petersburg-Clearwater, FL

Tampa, Florida
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  • Share of home purchase loans with >36% DTI: 49.8%
  • Share of home purchase loans with >43% DTI: 20.2%
  • Home purchase loan approval rate for >36% DTI: 83.3%
  • Home purchase loan approval rate for >43% DTI: 72.4%
  • Home purchase loan approval rate for all loans: 87.0%
  • Median interest rate across all home purchase loans: 3.25%

11. San Jose-Sunnyvale-Santa Clara, CA

The skyline of San Jose, which has a lower median rent than median mortgage payment
stellamc / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 49.9%
  • Share of home purchase loans with >43% DTI: 15.4%
  • Home purchase loan approval rate for >36% DTI: 87.8%
  • Home purchase loan approval rate for >43% DTI: 75.8%
  • Home purchase loan approval rate for all loans: 90.6%
  • Median interest rate across all home purchase loans: 2.99%

10. Denver-Aurora-Lakewood, CO

Denver, Colorado
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  • Share of home purchase loans with >36% DTI: 50.3%
  • Share of home purchase loans with >43% DTI: 21.9%
  • Home purchase loan approval rate for >36% DTI: 90.3%
  • Home purchase loan approval rate for >43% DTI: 83.9%
  • Home purchase loan approval rate for all loans: 92.7%
  • Median interest rate across all home purchase loans: 3.13%

9. Orlando-Kissimmee-Sanford, FL

Orlando skyline
Sean Pavone / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 51.4%
  • Share of home purchase loans with >43% DTI: 22.0%
  • Home purchase loan approval rate for >36% DTI: 81.2%
  • Home purchase loan approval rate for >43% DTI: 70.2%
  • Home purchase loan approval rate for all loans: 85.0%
  • Median interest rate across all home purchase loans: 3.25%

8. Sacramento-Roseville-Folsom, CA

Adonis Villanueva / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 51.8%
  • Share of home purchase loans with >43% DTI: 20.7%
  • Home purchase loan approval rate for >36% DTI: 89.3%
  • Home purchase loan approval rate for >43% DTI: 81.6%
  • Home purchase loan approval rate for all loans: 91.4%
  • Median interest rate across all home purchase loans: 3.13%

7. Salt Lake City, UT

Salt Lake City, Utah
f11photo / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 52.4%
  • Share of home purchase loans with >43% DTI: 21.8%
  • Home purchase loan approval rate for >36% DTI: 89.0%
  • Home purchase loan approval rate for >43% DTI: 81.8%
  • Home purchase loan approval rate for all loans: 90.8%
  • Median interest rate across all home purchase loans: 3.25%

6. Fresno, CA

Fresno California
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  • Share of home purchase loans with >36% DTI: 53.3%
  • Share of home purchase loans with >43% DTI: 19.9%
  • Home purchase loan approval rate for >36% DTI: 89.4%
  • Home purchase loan approval rate for >43% DTI: 80.2%
  • Home purchase loan approval rate for all loans: 90.1%
  • Median interest rate across all home purchase loans: 3.13%

5. Las Vegas-Henderson-Paradise, NV

Las Vegas Skyline
littlenySTOCK / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 54.9%
  • Share of home purchase loans with >43% DTI: 23.4%
  • Home purchase loan approval rate for >36% DTI: 85.6%
  • Home purchase loan approval rate for >43% DTI: 77.7%
  • Home purchase loan approval rate for all loans: 87.8%
  • Median interest rate across all home purchase loans: 3.25%

4. San Diego-Chula Vista-Carlsbad, CA

Dancestrokes / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 56.2%
  • Share of home purchase loans with >43% DTI: 24.2%
  • Home purchase loan approval rate for >36% DTI: 86.9%
  • Home purchase loan approval rate for >43% DTI: 78.5%
  • Home purchase loan approval rate for all loans: 89.5%
  • Median interest rate across all home purchase loans: 3.13%

3. Los Angeles-Long Beach-Anaheim, CA

The streets of Los Angeles, where median rent is relatively low
Sean Pavone / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 57.9%
  • Share of home purchase loans with >43% DTI: 24.8%
  • Home purchase loan approval rate for >36% DTI: 86.0%
  • Home purchase loan approval rate for >43% DTI: 77.7%
  • Home purchase loan approval rate for all loans: 88.7%
  • Median interest rate across all home purchase loans: 3.13%

2. Miami-Fort Lauderdale-Pompano Beach, FL

Miami, Florida
GagliardiImages / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 58.5%
  • Share of home purchase loans with >43% DTI: 26.2%
  • Home purchase loan approval rate for >36% DTI: 81.5%
  • Home purchase loan approval rate for >43% DTI: 72.9%
  • Home purchase loan approval rate for all loans: 83.6%
  • Median interest rate across all home purchase loans: 3.25%

1. Riverside-San Bernardino-Ontario, CA

Riverside, California
MattGush / Shutterstock.com
  • Share of home purchase loans with >36% DTI: 60.3%
  • Share of home purchase loans with >43% DTI: 26.3%
  • Home purchase loan approval rate for >36% DTI: 85.4%
  • Home purchase loan approval rate for >43% DTI: 77.3%
  • Home purchase loan approval rate for all loans: 87.5%
  • Median interest rate across all home purchase loans: 3.13%

Methodology

Man analyzing data on a laptop
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The data used in this analysis is from the Federal Financial Institutions Examination Council’s Home Mortgage Disclosure Act. Only conventional, home purchase loans originated in 2020 were considered.

To determine the locations with the highest debt-to-income ratios, researchers calculated the share of home purchase loans with a debt-to-income ratio of more than 36%. In the event of a tie, the location with the higher share of home purchase loans with a debt-to-income ratio of more than 43% was ranked higher.

To improve relevance, only metropolitan areas with at least 100,000 residents were included.

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