A third of U.S. homes are owned free and clear
- Article by: ALEJANDRO LAZO
- Los Angeles Times
- January 10, 2013 - 8:26 PM
What mortgage meltdown?
While millions of Americans have suffered the angst of lost homes, equity and pride, nearly a third of the nation's homeowners have no mortgage at all, according to an estimate released Thursday by real estate website Zillow.
The free-and-clear class includes, predictably, retirees who have chipped away at their debts for decades, but also a surprisingly high percentage of young people and those who live in relatively affordable regions.
Economists and housing analysts said that Zillow's estimates are in line with historical norms. But the proportion of these owners is likely to grow as the nation's baby boomers reach retirement. The fact that they can pay cash when they move will make them increasingly important players in a recovering housing market.
Out of the nation's largest metro areas, Pittsburgh; Tampa, Fla.; New York; Cleveland; and Miami had the highest percentages of mortgage-free homeowners. Washington, Atlanta, Las Vegas, Denver and Charlotte, N.C., had the lowest. That compares with 29.3 percent nationally -- nearly 21 million homeowners.
In the Twin Cities area, the free-and-clear homeownership rate was below the national average at 20.6 percent.
Zillow's senior economist, Svenja Gudell, said that in situations where home values are higher, more homebuyers are likely to require a mortgage to purchase a home. And that's certainly true in the Twin Cities, where home values are higher than the national median.
The lower free-and-clear rate could also be age-related. Areas with younger populations tend to have a lower rate because those homeowners haven't had a chance to pay off their mortgage, or haven't had time to accumulate enough wealth to buy a home outright.
Staff writer Jim Buchta contributed to this report.
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