Money & The Economy

Here are the cities with the highest share of zero-debt homeowners

A study released today showed which cities have the highest share of homeowners without mortgage debt, ranking U.S. cities by the proportion of such homeowners who are ‘free and clear’.

To assess “free and clear” homeowners, analysts used LendingTree’s proprietary database of almost all homes in the United States to calculate the proportion of homes with zero mortgage debt in each city. They also calculated the median value of mortgaged and non-mortgaged properties and their ratio.

Key findings:

The top free and clear cities get there by different means:

No. 1 Detroit arrived at the top spot for a not-so-great reason: mortgage lenders have historically viewed housing in the city as risky and, as a result, there are fewer homeowners here. This was often driven by discriminatory lending practices which excluded many Detroit residents from the mortgage market.
Miami ranks second and is a top destination for foreign buyers. These buyers are often wealthy and therefore pay cash for their home purchases.
Third place Las Vegas has a high ratio of homes owned by cash-ready investors. Persistent migration inflows mean potential landlords find a ready market and homes at affordable prices.
The least free and clear cities are Washington D.C., Virginia Beach and Seattle.
Washington D.C. and Seattle have some of the highest-priced homes in the nation. Even with the abundance of high-paying jobs in these cities, it’s difficult to purchase a home without a mortgage.
Virginia Beach has one of the highest rates of military households in the country. It also has more than its share of homeowners, thanks to the accessibility of mortgages from the Department of Veterans Affairs (VA). These typically younger mortgage holders are still paying off the loans, making Virginia Beach one of the least free and clear cities.
A curious result is that six cities in California are among the top 20 free and clear cities, despite relatively high home prices in the state. California’s property tax laws discourage homeowners from moving, so many have long tenures and have had the opportunity to pay down their mortgages.

“As home prices rise, these homeowners receive the full benefits and see their wealth accumulate,” said Tendayi Kapfidze, Chief Economist at LendingTree. “This wealth accumulation boosts consumer spending via the wealth effect, making for more dynamic economies.”

Kapfidze continued, “Homeowners who do not have mortgage debt can decide if and how they want to access this wealth, perhaps by taking out a loan to address life needs, and are generally better able to absorb financial shocks. The Federal Reserve’s measure of how much wealth households have in real estate equity has climbed from a $6-trillion level nine years ago to about $15 trillion in 2018.”

50 Largest Cities Ranked by Percent of Free & Clear Homes
Rank	Metro	Percent of Free & Clear Homes	Median Value of Non- mortgaged (“Free & Clear”) Homes	Median Value of Mortgaged Homes
1	Detroit	55%	$103,000	$206,000
2	Miami	52%	$236,000	$303,000
3	Las Vegas	48%	$231,000	$252,000
4	Birmingham, Ala.	46%	$127,000	$188,000
5	Tampa, Fla.	45%	$166,000	$219,000
6	Oklahoma City	45%	$131,000	$162,000
7	San Diego	44%	$580,000	$561,000
8	San Francisco	43%	$935,000	$874,000
9	Orlando, Fla.	42%	$191,000	$238,000
10	Phoenix	42%	$232,000	$254,000
11	Pittsburgh	42%	$135,000	$170,000
12	Kansas City, Mo.	42%	$156,000	$200,000
13	Memphis, Tenn.	42%	$113,000	$170,000
14	Buffalo, N.Y.	42%	$128,000	$160,000
15	Los Angeles	42%	$660,000	$611,000
16	Cleveland	41%	$112,000	$154,000
17	San Jose, Calif.	41%	$1,134,000	$1,032,000
18	Sacramento, Calif.	40%	$388,000	$395,000
19	Riverside, Calif.	39%	$319,000	$353,000
20	Jacksonville, Fla.	39%	$156,000	$209,000
21	Atlanta	39%	$174,000	$219,000
22	New York	38%	$458,000	$465,000
23	Cincinnati	38%	$146,000	$178,000
24	Milwaukee	37%	$201,000	$212,000
25	Charlotte, N.C.	36%	$176,000	$223,000
26	Indianapolis	36%	$104,000	$155,000
27	Chicago	35%	$210,000	$244,000
28	Columbus, Ohio	35%	$151,000	$202,000
29	Minneapolis	35%	$254,000	$271,000
30	St. Louis	35%	$128,000	$181,000
31	Houston	34%	$177,000	$225,000
32	New Orleans	34%	$176,000	$215,000
33	Salt Lake City	34%	$316,000	$306,000
34	San Antonio	34%	$183,000	$210,000
35	Nashville, Tenn.	33%	$219,000	$259,000
36	Louisville, Ky.	33%	$142,000	$183,000
37	Dallas	33%	$192,000	$249,000
38	Austin, Texas	31%	$278,000	$297,000
39	Providence, R.I.	29%	$263,000	$274,000
40	Raleigh, N.C.	29%	$208,000	$241,500
41	Denver	29%	$385,000	$403,000
42	Portland, Ore.	28%	$387,000	$386,000
43	Philadelphia	28%	$186,000	$246,000
44	Baltimore	27%	$237,000	$296,000
45	Boston	26%	$473,000	$468,000
46	Richmond, Va.	25%	$223,000	$244,000
47	Hartford, Conn.	24%	$211,000	$234,000
48	Washington	23%	$392,000	$409,000
49	Virginia Beach, Va.	22%	$216,000	$234,000
50	Seattle	22%	$447,000	$480,000

Carl Fox

Carl Fox is the senior money and finance writer for Conservative Daily News. Follow him in the "Money & The Economy" section at CDN and see his posts on the "Junior Economists" Facebook page.