By Mike O’Donnell | Guest Commentary, Rocky Mountain Voice
Since 2021, inflation has been higher in Colorado than in any other state, mostly because of the cost of owning or renting a home. But this is also because the state legislature enjoys imposing new fees (you aren’t allowed to call them taxes) on seemingly anything they can think of.
Colorado residents may not, however, realize that because it is now so expensive to live in the state, Coloradans owe more money in mortgages, auto loans, credit cards, student loans and other consumer obligations than residents of ANY other state.
The latest data from the Consumer Credit Panel at the New York Federal Reserve indicates that during the fourth quarter of 2024, the 4,983,560 households in Colorado EACH owed an average of $90,540 in consumer loans.
This was more than households owed in California ($86,000), New York ($58,870), Florida ($59,800) and Texas ($57,890) at the end of 2024.
Colorado has always been a more expensive state to live in than New York, Florida or Texas – although California has always generally been thought of as the most expensive state to live in, as it usually has been.
But after the great recession, housing prices in Colorado grew more rapidly than in any other state. And by 2019, the cost of living in Colorado was greater than the cost of living in California – necessitating Colorado home owners to take out progressively larger and larger home mortgages to afford to live here.
Average outstanding home mortgage balances fell by $680 for Coloradans to $70,110 in 2024, indicating that there might finally be a slight easing in housing costs here. But that is still almost $2,000 more than the average home mortgage balance in California.
The bottom line is that Coloradans are more highly leveraged than the residents of any other state.
This wouldn’t be an issue if the economy is mostly growing and burbling along nicely, thank you very much.
But if the economy dips or slows significantly (and the first GDP estimate for 2025 was slightly negative, indicating that this may be a possibility), many Coloradans may find themselves in incredibly financially stressful situations.
Colorado residents already knew the cost of living here was high. Now they can tack on the realization that they’re carrying record-breaking personal debt to go with it.
Mike O’Donnell is a small business advocate, nonprofit executive and economic development leader based in Kirk, Colorado. He currently serves as Executive Director of Prairie Rose Development Corp., a mission-driven lender supporting underserved entrepreneurs across the state.
Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.