Pittsburgh, and Tampa, Fla., had the highest rates of mortgage-free property owners among U.S. metropolitan areas — 38.6 percent and 33.2 percent, respectively. San Diego ranked 20th in the nation at 21.5 percent.
Zillow, which typically analyzes negative home equity, switched gears this time to look at the share of homeowners with no mortgage. This is an important indicator because it points out a group of homeowners who may be more flexible than people with mortgages in putting their homes on the market, said Stan Humphries, chief economist at Zillow.
“By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas,” Humphries said.
San Diego County has a lower-than-normal level of homes for sale: About 4,140 listings are currently on the market, the lowest level in more than 3½ years. Another perspective: The present tally is approximately half of what it was a year ago.
Inventory has fallen for 18 straight months, an effect of dwindling foreclosures and the fact that a significant number of homeowners can’t or won’t sell their properties because they are underwater on their mortgages.
Several factors help explain an area’s mortgage-free rate. Obvious ones include the median age of homeowners: People 65 to 74 are the most likely to have no home-loan debt because they’ve had enough time to pay off their mortgages.
However, the Zillow analysis also showed that nearly 35 percent of homeowners nationwide in the 20 to 24 age category had no mortgage. The share in San Diego County is 42 percent.
Housing analysts said parents with enough means are likely helping these young adults take advantage of relatively low housing prices. They may be giving money or extending private loans to their children.
Regardless of age group, there has been a clear rise in cash-only home purchases in recent years. For example, nearly one in three home resales in the county in October were cash transactions, based on numbers from real estate tracker DataQuick.
Other factors that account for an area’s mortgage-debt rate include:
Median home price. Homeowners in an area with a lower median price are more likely to pay off their mortgages faster.
High credit scores. Nationally, 44 percent of homeowners with free and clear mortgages have VantageScores that range from 800 to 900. VantageScore is one of several ways to measure a person’s creditworthiness.
Written by,
Lily Leung
