LendingTree Reveals the Most Free & Clear Cities in America
CHARLOTTE, N.C., Sept. 26, 2018 /PRNewswire/ -- LendingTree®, the nation's leading online loan marketplace, today released its study on which cities have the highest share of homeowners without mortgage debt obligations, 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
Median
Median
of Free
Value of
Value of
& Clear
Non-
Mortgaged
Homes
mortgaged
Homes
("Free
& Clear")
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, 46% $127,000 $188,000
Ala.
---
5
Tampa, Fla. 45% $166,000 $219,000
---
6
Oklahoma 45% $131,000 $162,000
City
---
7
San Diego 44% $580,000 $561,000
---
8
San 43% $935,000 $874,000
Francisco
---
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, 42% $156,000 $200,000
Mo.
---
13
Memphis, 42% $113,000 $170,000
Tenn.
---
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, 41% $1,134,000 $1,032,000
Calif.
---
18
Sacramento, 40% $388,000 $395,000
Calif.
---
19
Riverside, 39% $319,000 $353,000
Calif.
---
20
Jacksonville, 39% $156,000 $209,000
Fla.
---
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, 36% $176,000 $223,000
N.C.
---
26
Indianapolis 36% $104,000 $155,000
---
27
Chicago 35% $210,000 $244,000
---
28
Columbus, 35% $151,000 $202,000
Ohio
---
29
Minneapolis 35% $254,000 $271,000
---
30
St. Louis 35% $128,000 $181,000
---
31
Houston 34% $177,000 $225,000
---
32
New 34% $176,000 $215,000
Orleans
---
33
Salt Lake 34% $316,000 $306,000
City
---
34
San Antonio 34% $183,000 $210,000
---
35
Nashville, 33% $219,000 $259,000
Tenn.
---
36
Louisville, 33% $142,000 $183,000
Ky.
---
37
Dallas 33% $192,000 $249,000
---
38
Austin, 31% $278,000 $297,000
Texas
---
39
Providence, 29% $263,000 $274,000
R.I.
---
40
Raleigh, N.C. 29% $208,000 $241,500
---
41
Denver 29% $385,000 $403,000
---
42
Portland, 28% $387,000 $386,000
Ore.
---
43
Philadelphia 28% $186,000 $246,000
---
44
Baltimore 27% $237,000 $296,000
---
45
Boston 26% $473,000 $468,000
---
46
Richmond, 25% $223,000 $244,000
Va.
---
47
Hartford, 24% $211,000 $234,000
Conn.
---
48
Washington 23% $392,000 $409,000
---
49
Virginia Beach, 22% $216,000 $234,000
Va.
---
50
Seattle 22% $447,000 $480,000
---
To view the full report, visit: https://www.lendingtree.com/home/mortgage/most-free-and-clear-cities-in-america/.
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.
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