Around 37% of American households no longer have a home mortgage to pay, according to a new analysis.
The figure grew after the Great Recession years, the online property database company Zillow said in its study. The share of homeowners who are paying off their mortgages has surged by 5.5 percentage points.
Realtor.com Director of Economic Research Javier Vivas attributed the increase in mortgage-free ownership to brighter economic conditions.
Zillow also cited an aging population and change in owner demographics as another reason for the increase. Millennials tend to wait longer to acquire a home partially because of rising costs of living and student debt. For this reason, older Americans constitute a more considerable share of total homeownership. They have had years to pay off residential properties and build wealth.
The company said the entry of younger generations into the real estate market could reverse this trend.
Sudden changes in the value of the home and the opportunity cost of other higher investment returns when mortgage rates are low are among the trade-offs mortgage payers face.
At 54%, West Virginia had the highest share of “free and clear” ownership in 2017, the most recent data available to Zillow. On the other hand, households in Maryland (27%) and the District of Columbia (24%) had the lowest shares.
Meanwhile, mortgage rates were on rising in the week ending July 18, the only third time in 13 weeks, according to Freddie Mac.
The 30-year fixed rates rose by six basis points to 3.81% in the week ending July 18. Despite the increase, 30-year rates maintained its close to the lowest level since late 2016, the Freddie Mac figures showed. The 30-year fixed rates slid by 71 basis points, compared to the same period last year.
Freddie Mac observed that, despite the latest rate surge, homebuyers continued to take advantage of multi-year low rates.