Mortgage burdens in Phoenix pushed the city near the bottom of a new ranking of metro areas with residents living within their means.EXPAND
Mortgage burdens in Phoenix pushed the city near the bottom of a new ranking of metro areas with residents living within their means.

Report: Metro Phoenix Residents Almost the Worst at Living Within Our Means

Metro Phoenix is one of the lowest-ranked areas for residents spending within their means, according to a new study.

The report from LendingTree combined anonymous data from the company’s users with average household income numbers from the U.S. Census Bureau.

Phoenix nearly bottomed out the list of the top 50 metropolitan areas, placing 48th.

The report surmised that the housing bubble of the last decade hit Phoenix especially hard, with a large number of residents whose mortgages take up a large portion of their income. Other cities in the Southwest and California are also struggling under housing debt.

“Like Las Vegas, Phoenix is still recovering from the housing bust of the late 2000s, and residents are stretched,” the report says.

Yet unlike cities with higher average incomes, such as San Francisco, with residents who can support such mortgages, Phoenix has a lower-than-average household income among the 50 metro areas LendingTree examined.

“The challenge in Phoenix, I would say, is mostly on the housing side,” report author Brian Karimzad told Phoenix New Times.

“Phoenix residents have housing debt balances, mortgage balances, that are 23 percent higher than the national average, but their incomes are lower than the national average,” he said.

It could be that retirees in the Valley hold down the average household income, according to Karimzad, since the elderly tend to hold less debt than the average working-age person.

But it’s not just housing that presents a problem for Phoenix’s debt-and-spending disparity.

Non-housing debt also is an issue for Phoenix residents, who have high balances compared to other cities. Karimzad explained that not only do Phoenix residents have high housing debt balances, they also generally carry not-insignificant credit card or loan debt.

“In Phoenix, folks are a bit stretched on housing,” he said. “But they’re stretching on a nice car, or a bit of credit card debt, and personal debt.”

Luckily, Phoenix wasn’t in last place. That dubious distinction was awarded to San Antonio, Texas. And we were one spot ahead of Las Vegas.

So, where are people staying within their means? The top cities are found in the Carolinas, along with a couple in the Rust Belt, according to the report. Karimzad said that these places offer a lower cost of living; some of them even have decent manufacturing bases that prop up incomes.

The top and bottom five cities from LendingTree's ranking are below.

Metro areas spending within their means:

1. Greenville, South Carolina
2. Greensboro, North Carolina
3. Kansas City, Missouri
4. Buffalo, New York
5. Charlotte, North Carolina
6. Milwaukee, Wisconsin.

Metro areas spending beyond their means:

50. San Antonio, Texas
49. Las Vegas, Nevada
48. Phoenix, Arizona
47. Jacksonville, Florida
46. Orlando, Florida
45. Virginia Beach, Virginia

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