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Mortgage Right Moment Part 4: How Debt Impacts Your Wealth

You already know that debt impacts your wealth – the debt to income ratio – but, the question is how much? As Huntsville has grown so have the salaries and median home price – increasing debt for many here in the Tennessee Valley.

So how much are people making around here? According to, the average salary in
Huntsville is $72,000. A more realistic metric considers the average annual salary for the entire
metropolitan area, which US News & World Report has concluded to be $55,980 – a solid figure when
compared to the national average of $53,490.

But wealth is more than income. It is balanced against debt and assets.

The harsh reality of our financial position is that most of us have a lot of debt. According to the St.
Louis Federal Reserve, the average American household has an average credit card balance of $5,987,
nearly double that of households only 30 years ago – and this figure doesn’t include the average
unsecured personal loan debt average of $5,538 per family. The average auto debt is $17,553. The
average mortgage debt is $215,665. According to, the average individual student loan
debt for our State is $36,856. While difficult to track per household, studies by the Federal Reserve
show that over 21% of the households in Alabama have medical debt that has gone into collection
procedures. Alabama also holds the unfortunate distinction of being the highest in bankruptcies
throughout the entire nation.

These debt figures don’t take into consideration the interest rate on that debt, which can be anywhere
from 2-9% on average. The longer it takes to pay off this debt, the higher the debt increases. This
debt perspective paints a grim picture – the average Alabama household with a single income makes
$55,980 while holding a compounding debt of $281,599. With the vast majority of these debts being
paid off at the minimum monthly amount, we can reasonably expect to be in debt for our entire lives.

What Causes Appreciation?

The primary reasons for a rapid increase in home value are demographic influences, position amongst
locale, and economic factors.

In recent years Huntsville has become more of a lucrative city due to affordable living and award winning schools. See below some of the great awards we have won:

2018 – #1 “City for Tech Sector Job Outside of Silicon Valley” (Business Insider)
FEB 2021 – #8 “Coolest Cities with the Lowest Cost of Living” (
JUL 2021 – #2 “Highest Salaries and Cheap Costs of Living” (Motley Fool – Ascent)
JUL 2021 – #1 “Best Places to Live in the South” (US News & World Report)
AUG 2021 – #1 “Largest City in Alabama” (Associated Press)
2010 COLI – 91.2 (100 = National Average) (78.7 Housing)
2021 COLI – 91.3 (88 Housing)

It is never a bad idea to reflect on your debt to income ratio to better understand your financial position. If you are interested in either selling or buying this year connect with our partners at MortgageRight to ensure your finances are in order. 

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