20.6 Million U.S. Homeowners Own Homes Free And Clear Of Mortgage Debt
Pittsburgh, Tampa and New York Top Metros For Free-And-Clear Homeownership; Age, Credit Score and Local Home Values Help Influence Ratios Of Debt-Free Homeowners
SEATTLE, Jan. 10, 2013 /PRNewswire/ — Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow® analysis of mortgage data.
Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free and clear of mortgage debt.
Among the nation’s 30 largest metro areas included in the study, Pittsburgh (38.6 percent), Tampa (33.2 percent), New York (29.7 percent), Cleveland (29.4 percent) and Miami (28.9 percent) had the highest percentage of free-and-clear homeowners. Washington, D.C. (15.5 percent), Atlanta (17.7 percent), Las Vegas (18.3 percent), Denver (18.5 percent) and Charlotte (20 percent) had the lowest percentage.
A number of elements influence the percentage of free-and-clear homeowners in a given area, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly.
Demographic factors including the age and credit rating of primary borrowers also influence free-and-clear homeownership rates. Zillow found that 65- to 74-year-olds are most likely to be free-and-clear (20.5 percent), followed by 74- to 84-year-olds (17.9 percent). This is attributed to the fact that the longer someone owns a home, the longer they have to pay off their mortgage. Interestingly, when examining free-and-clear ownership rates as a percentage of homeowners in various age groups, Zillow found 34.5 percent of 20- to 24-year-old homeowners are free of mortgages.
Among homeowners who own their homes outright, 44 percent have a high VantageScore – representing their credit rating – between 800 and 900. Only 15.5 percent of homeowners with the highest credit rating of 900-990 are free-and-clear.