Debt To Income Ratio Better In Rural America

USDA's annual Rural America at a Glance Report series usually contains a specific topic of focus, along with traditional offerings about population, income, and economics.

Tracey Farrigan with ERS says for this year's edition, debt to income in rural areas was studied, which she pointed out is another measure associated with buying power, similar to income itself.  She noted a look at rural debt to income trends over the two-plus decades indicates.

“Rural areas have consistently... had relatively low debt to income ratios, and as measured by the share of rural counties that has low debt to income relative to the share that has high debt to income,” she said.

That trend is opposite in urban areas, which Farrigan is a positive thing for rural America.

“Part of that is that if you have low debt-to-income, it can impact things like access to credit, which can allow households to smooth economic shocks," Farrigan said.  "Credit just not for the sake of credit, but also to build assets over time and enhance financial standing. And when you look at it as an aggregate measure for the county as a whole, it can suggest similar things for an entire area. For instance, a lower overall debt-to-income ratio may make rural counties more resilient to economic shocks and stresses, such as those brought about by the COVID-19 pandemic.” 

Click Here to check out the entire Rural America at a Glance Report.

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