Photo by Any Lane
More American households are owning their homes free and clear with the burden of paying a mortgage out of the picture, according to a new data analysis from Zillow. The data reveals that 37 percent of homes in 2017 no longer had mortgages to pay.
Zillow isn’t the only one supporting this claim. Data from the U.S. Census Bureau also supports the claim that nearly 40 percent of all U.S. homes are mortgage-free, Mortgage Professional America.
According to the Census Bureau, the share of U.S. homes owned outright increased by 5 percent between 2012 and 2022. This increase means that almost 40 percent of Americans now own their homes without mortgages, up from 34 percent in 2013. The report attributes this rise in mortgage-free homeownership to factors such as low mortgage rates, opportunities for refinancing, and favorable new loans for Baby Boomers, Forbes reported.
The Census Bureau data further reveals that between 2012 and 2022, the number of mortgage-free single-family homes increased by 7.9 million to a total of 33.3 million. Additionally, about 33 percent of owner-occupied homes in 2022 were owned by individuals aged 65 and above.
The trend of mortgage-free homeownership is driven by various factors, including low mortgage rates, opportunities for refinancing, and an aging population of Baby Boomers who have paid off their mortgages over time.
West Virginia ranks in the top slot with 54 percent of mortgage-free homes, followed by Mississippi at 51 percent, and Louisiana at 48 percent.
“The states with the lowest rates of mortgage-free homes are places with either less affordable homes, more of younger households relative to old ones, or both,” Zillow economist Jeff Tucker told Forbes.
“California has got the most expensive cities in the country, including San Jose, San Francisco, Los Angeles and smaller coastal towns,” Tucker said. “Even Sacramento is expensive nowadays in the scheme of things. Really expensive places make it hard for people to buy their homes outright. And it just takes longer to work down that mortgage, so I think that’s why we see a pretty low rate of free-and-clear homeownership there.”
Forty-one percent of homes owned by Baby Boomers were mortgage-free in 2017. Baby Boomers who are in the 55-to-69 age group comprise about 33 percent of all homeowners and have had many years to pay off their mortgages and build wealth. There are almost twice as many Baby Boomer homeowners (25,661,552) as there are Millennial homeowners in the 25-to-39 age group (12,662,948), Forbes reported.
Sixty-eight percent of adults 70 and older are mortgage-free, while 15.9 percent of millennials are free and clear of mortgage payments.
Photo by Any Lane: https://www.pexels.com/photo/happy-black-family-sitting-on-stairs-of-modern-house-5728209/
