30% of U.S. Homeowners Are Mortgage-Free, Zillow Says

Media coverage of the real estate market has focused so much on the mortgage woes of homeowners over the past five years, you might be excused for believing that only a small minority of homeowners actually, well, own their homes -- mortgage-free. But you'd be mistaken, a report released by listing service Zillow suggests.

As of the third quarter of 2012, nearly 30 percent of homeowners, or just about 21 million Americans, were free and clear of a mortgage. Zillow told AOL Real Estate that that rate is 3 percentage points lower than the number of mortgage-free homeowners in 2010, indicating that the country's debt burden has creeped up over the last 2 years.

But the percentage of mortgage-free homeowners is virtually the same as in 2000, a fact that may come as surprise considering the steep price declines of the last five years. The rate of full ownership varies from region to region based on median home price and age.
Areas with a higher median age and lower median home price have the highest proportion of homeowners who own their homes outright. New York, Cleveland and Miami ranked as the markets with the highest rates of full ownership, while Washington, D.C., Atlanta and Las Vegas had the lowest rates.

"Homeowners unencumbered by a mortgage may be more flexible than indebted homeowners, and therefore more apt or willing to list their homes or enter the market for a new property," Zillow chief economist Stan Humphries said in a statement. "By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas."

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