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story.lead_photo.caption A prospective buyer enters a home for sale in Peoria, Ill., on May 30, 2019. Bloomberg photo by Daniel Acker.

More Americans are living mortgage-free, according to a Zillow data analysis.

About 37% of U.S. households are "free and clear," meaning they no longer have a home mortgage to pay, the real estate data firm said. The number has ticked upward after the recession. Over the past 10 years, the share of homeowners paying off their mortgages has risen 5.5 percentage points.

"In general, higher home equity is financially preferable, and the rise in mortgage-free ownership is in line with brighter economic conditions, which is why we've seen the free-and-clear share increase over the last decade," said Javier Vivas, director of economic research at

An aging population and change in owner demographics also are factors behind the increase, according to Zillow. Younger Americans are likely to wait longer to a buy homes in part because of rising living costs and student debt. As a result, older Americans comprise a larger share of total homeownership and have had years to pay off homes as well as build wealth. This trend could reverse as younger generations age and enter the real estate market.

Trade-offs associated with paying off a mortgage include abrupt changes to the value of the home and the lost opportunity for other higher-investment returns when mortgage rates are low, Vivas said.

Mortgage characteristics vary by state, and those with lower housing prices typically have higher rates of fully paid mortgages. In 2017, the most recent available data, West Virginia had the highest share of "free and clear" ownership at 54%. Maryland and the District of Columbia were on the other end of the spectrum with rates of 27% and 24%, respectively.

Over the past decade, the median price of an existing home in the U.S. has increased by more than 60%.

Zillow analyzed data from the U.S. Census Bureau's American Community Survey, which occurs annually and includes about 3.5 million responses. The Census Bureau also runs the American Housing Survey. While the upward trend in "free and clear" homes is evident in both surveys, the housing survey suggests the rate is higher -- at 40% of total owner-occupied units. The survey is conducted every other year and covers a smaller sample size of 115,000 units.

Business on 07/18/2019

Print Headline: Mortgages paid off for 37% of U.S. homes, data show


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