2 million California homeowners live mortgage-free
Two million Californians are living a dream scenario for the American Dream: They own their home free and clear of a mortgage.
New census stats show 29 percent of all owner-occupied residences in the state were mortgage-free last year, up from 23 percent a decade ago. That’s a surprising twist in an era marked by heated discussions about housing affordability as overall ownership numbers slipped.
California’s debt-free flock has grown by 339,000 homes — 20 percent — in a decade. Meanwhile, California homeowners with mortgages have dropped by 498,000 — 20 percent — to 4.93 million since 2006, the peak of an easy-lending era.
Now, 2016’s share of California owners living mortgage-free runs below the U.S. norm: Nationwide, 27.7 million homeowners have no mortgage or 37 percent of all ownership situations. It’s pretty obvious to see that housing costs are a key reason for the gap, as the median value of a California mortgage-less home is $435,000 vs. $166,000 nationwide.
Still, California’s 10-year increase in mortgage-free homes was quite faster than the nation’s 14 percent growth. The growing popularity of mortgage-free living can be tied to numerous factors, including several ugly reminders of painful borrowing mistakes made in last decade’s housing bubble.
Numerous Californians couldn’t afford their mortgages a decade ago and lost homes to foreclosure — and still don’t own today. Other borrowers today choose to eschew debt as lenders made it more difficult to borrow.
Demographics are in play, too, as an aging and more stable California population stays put and pays off home loans. And years of historically low-interest rates likely motivated some owners to use savings — earning very little at the bank — to pay off a mortgage or buy in all-cash deals.
Mortgage-free living is equally common throughout Southern California counties, with the share of occupied homes having no mortgage relatively […]