Cities With the Most Working-Age Residents Who Have Paid off Their Homes

Note: This is the most recent release of our Cities With the Most Working-Age Residents Who Have Paid Off Their Homes study. To see data from previous years, please visit the Full Results section below.

The recent economic shutdown resulted in record unemployment and left millions of Americans struggling financially. Even as the country reopened and people went back to work, some aspects of the economy have yet to return to normalcy. Housing costs are often the biggest line item for most people’s budgets, and the recent inflationary climate has made it difficult for many people to pay their mortgages.

Americans who own their homes outright are less vulnerable during recessions compared to those households with large mortgages. According to Census Bureau data, while nearly 63% of owner-occupied housing units are owned free and clear for homeowners age 65 and older, less than 28% of homeowners below retirement age have paid for their homes in full. This can leave the vast majority of the working population exposed to financial impact during periods of economic turmoil.

Percentage of Mortgages That Are Seriously Delinquent

Mortgage delinquency rates are trending up after declining to an all-time low during COVID

Mortgage delinquency rates are trending up after declining to an all-time low during COVID
Source: Construction Coverage analysis of Federal Reserve Bank of New York’s Household Debt and Credit Report data | Image Credit: Construction Coverage

Mortgage delinquencies tend to rise significantly during periods of economic turmoil. According to quarterly data from the Federal Reserve Bank of New York, the delinquency rate on mortgages peaked at over 8% during the Great Recession and declined to below 1% in 2019. While the delinquency rate declined even further to 0.27% in 2021—primarily due to mortgage forbearance programs and economic stimulus efforts during the pandemic—the subsequent widespread inflation has started to take its toll. As of Q3 2023, the mortgage delinquency rate  climbed to 0.72%.

Home Value and Housing Costs for Homeowners by Mortgage Status

Homeowners with mortgages have higher incomes but also significantly higher housing costs

Homeowners with mortgages have higher incomes but also significantly higher housing costs
Source: Construction Coverage analysis of U.S. Census Bureau’s American Community Survey data | Image Credit: Construction Coverage

As expected, monthly housing costs between homeowners with and without mortgages differ considerably. The median housing costs—including mortgage payments, insurance, utilities, and other home-related expenses—for homeowners under age 65 with a mortgage totaled to 19% of household income. This figure was just 9% for homeowners under retirement age without a mortgage.

In addition to higher monthly housing costs, working-age homeowners with a mortgage tend to have higher household incomes. Among households with a mortgage, the median income is just under $114,000, compared to slightly over $80,000 for those households without a mortgage.


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Owner-Occupied Homes That Are Owned Outright by Location

Southern states have the most residents who have paid off their homes

Southern states have the most residents who have paid off their homes
Source: Construction Coverage analysis of U.S. Census Bureau’s American Community Survey data | Image Credit: Construction Coverage

Mortgage payoff rates vary substantially across the country. While at the national level, the share of homeowners under age 65 who have paid off their homes is 27.7%, not all areas have equal rates of free-and-clear homeownership. Being mortgage-free is strongly (negatively) correlated with both household income and home value, so certain states in the South like Mississippi (40.2%), West Virginia (38.9%), Louisiana (35.8%), and Arkansas (35.4%) all have shares of owner-occupied homes that are paid off above 35%.

At the other end of the spectrum, Maryland has the lowest rate of owner-occupied homes that are paid off at 18.3%. Similarly, states along the Pacific Coast—where home values skyrocketed during the pandemic—have some of the lowest rates of free-and-clear homeownership among the working-age population. California (22.7%), Washington (22.8%), and Oregon (22.9%) sit at 45th, 44th, and 43rd out of all 50 states, respectively.

At the metropolitan level, nine out of the top 15 large metros for free-and-clear homeownership are found in the South—led by Houston, TX at 32.5%. Conversely, locations that saw their housing prices and cost of living jump during COVID—such as Washington, DC (16.1%) and Denver, CO (17.3%)—have the lowest share of owner-occupied homes that are paid off.

Below is a complete breakdown of residents who have paid off their homes across more than 250 metropolitan areas and all 50 states. The analysis was conducted by researchers at Construction Coverage using data from the U.S. Census Bureau. For more information, refer to the methodology section.

Large Metros With the Most Residents Who Have Paid off Their Homes

Top MetrosPercentage*
1. Houston-The Woodlands-Sugar Land, TX32.5%
2. Miami-Fort Lauderdale-Pompano Beach, FL31.2%
3. Buffalo-Cheektowaga, NY30.9%
4. New Orleans-Metairie, LA30.6%
5. Detroit-Warren-Dearborn, MI30.1%
6. Tulsa, OK30.1%
7. San Antonio-New Braunfels, TX29.9%
8. Pittsburgh, PA29.3%
9. Oklahoma City, OK29.2%
10. Birmingham-Hoover, AL28.7%
11. Dallas-Fort Worth-Arlington, TX28.3%
12. Rochester, NY27.6%
13. Cleveland-Elyria, OH27.6%
14. Tampa-St. Petersburg-Clearwater, FL27.2%
15. Tucson, AZ27.0%
Bottom MetrosPercentage*
1. Washington-Arlington-Alexandria, DC-VA-MD-WV16.1%
2. Denver-Aurora-Lakewood, CO17.3%
3. Virginia Beach-Norfolk-Newport News, VA-NC17.7%
4. Baltimore-Columbia-Towson, MD18.6%
5. Richmond, VA18.6%
6. Raleigh-Cary, NC19.0%
7. Salt Lake City, UT19.1%
8. Portland-Vancouver-Hillsboro, OR-WA19.4%
9. Seattle-Tacoma-Bellevue, WA20.1%
10. San Diego-Chula Vista-Carlsbad, CA20.4%
11. Minneapolis-St. Paul-Bloomington, MN-WI20.5%
12. San Francisco-Oakland-Berkeley, CA20.5%
13. Atlanta-Sandy Springs-Alpharetta, GA21.0%
14. Boston-Cambridge-Newton, MA-NH21.1%
15. Sacramento-Roseville-Folsom, CA21.4%

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Midsize Metros With the Most Residents Who Have Paid off Their Homes

Top MetrosPercentage*
1. McAllen-Edinburg-Mission, TX51.1%
2. Brownsville-Harlingen, TX50.9%
3. Beaumont-Port Arthur, TX44.7%
4. El Paso, TX40.3%
5. Ocala, FL36.1%
6. Lafayette, LA35.5%
7. Corpus Christi, TX35.3%
8. Naples-Marco Island, FL33.7%
9. Montgomery, AL33.5%
10. North Port-Sarasota-Bradenton, FL33.4%
11. Myrtle Beach-Conway-North Myrtle Beach, SC-NC32.2%
12. Asheville, NC32.1%
13. Scranton–Wilkes-Barre, PA31.9%
14. Greenville-Anderson, SC31.8%
15. Chattanooga, TN-GA31.7%
Bottom MetrosPercentage*
1. Oxnard-Thousand Oaks-Ventura, CA18.0%
2. Colorado Springs, CO18.3%
3. Fort Collins, CO18.6%
4. Stockton, CA18.7%
5. Ogden-Clearfield, UT19.2%
6. Des Moines-West Des Moines, IA19.5%
7. Urban Honolulu, HI19.8%
8. Portland-South Portland, ME20.1%
9. Provo-Orem, UT20.9%
10. Greeley, CO21.2%
11. Worcester, MA-CT21.3%
12. Vallejo, CA21.3%
13. Omaha-Council Bluffs, NE-IA22.0%
14. New Haven-Milford, CT22.1%
15. Boise City, ID22.5%

Small Metros With the Most Residents Who Have Paid off Their Homes

Top MetrosPercentage*
1. The Villages, FL47.5%
2. Flagstaff, AZ43.1%
3. Anniston-Oxford, AL43.0%
4. Erie, PA41.0%
5. Johnson City, TN41.0%
6. Laredo, TX40.9%
7. Morristown, TN40.5%
8. Lake Havasu City-Kingman, AZ39.8%
9. Homosassa Springs, FL39.7%
10. Johnstown, PA39.6%
11. Decatur, AL39.5%
12. Goldsboro, NC38.9%
13. Cleveland, TN38.5%
14. Jonesboro, AR38.4%
15. Punta Gorda, FL38.2%
Bottom MetrosPercentage*
1. Racine, WI16.1%
2. California-Lexington Park, MD18.1%
3. Lincoln, NE18.3%
4. Grand Junction, CO18.4%
5. Merced, CA18.7%
6. Cheyenne, WY18.8%
7. Chico, CA18.8%
8. Olympia-Lacey-Tumwater, WA19.1%
9. Dover, DE20.0%
10. Lawrence, KS20.2%
11. Pittsfield, MA20.9%
12. Clarksville, TN-KY21.0%
13. Albany-Lebanon, OR21.1%
14. Bremerton-Silverdale-Port Orchard, WA21.2%
15. Charlottesville, VA21.4%

States With the Most Residents Who Have Paid off Their Homes

Top StatesPercentage*
1. Mississippi40.2%
2. West Virginia38.9%
3. Louisiana35.8%
4. Arkansas35.4%
5. Oklahoma34.3%
6. Alabama34.0%
7. Texas33.7%
8. New Mexico33.4%
9. Montana33.1%
10. South Dakota32.6%
11. South Carolina31.5%
12. Kentucky31.0%
13. North Dakota30.5%
14. Wyoming30.4%
15. Michigan30.3%
Bottom StatesPercentage*
1. Maryland18.3%
2. Colorado20.0%
3. Virginia21.1%
4. Utah21.3%
5. Massachusetts21.5%
6. California22.7%
7. Washington22.8%
8. Oregon22.9%
9. Connecticut23.0%
10. Rhode Island23.2%
11. Hawaii23.5%
12. Delaware23.6%
13. New Jersey23.9%
14. Minnesota24.1%
15. Idaho24.9%

*Share of owner-occupied homes that are paid off (homeowners under age 65)

Methodology

The data used in this study is from the U.S. Census Bureau’s American Community Survey 2022 1-Year Estimates. To determine the locations with the most residents who have paid off their homes, researchers at Construction Coverage ranked locations by the share of owner-occupied households without a mortgage (owned “free and clear”). For relevance, only owner-occupied households with positive income and a working-age primary householder (under the age of 65) were considered. In the event of a tie, the location with the larger median home value for those owner-occupied homes owned without a mortgage was ranked higher.

To improve relevance only metropolitan areas with complete data were included. Additionally, metros were grouped into cohorts based on population: small (under 350,000), midsize (350,000–999,999), and large (1,000,000 or more).

References

  1. Federal Reserve Bank of New York. (2023, Q3). Household Debt and Credit Report. https://www.newyorkfed.org/microeconomics/hhdc.html. Retrieved December 15, 2023.
  2. Consumer Financial Protection Bureau. (n.d.). Mortgage forbearance during COVID-19: What to know and what to do. https://www.consumerfinance.gov/coronavirus/mortgage-forbearance-during-covid-19-what-know-what-do/. Retrieved December 15, 2023.
  3. U.S. Census Bureau. (2022). American Community Survey 1-Year Estimates [Data set]. https://www.census.gov/programs-surveys/acs. Retrieved December 15, 2023.

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