34% of California's homeowners are mortgage-free

"In a five-year span, as mortgage rates hit all-time lows and affordability plummeted, the number of Californians with no home loans grew eight times faster than those who borrowed against their properties. My trusty spreadsheet reviewed fresh Census Bureau data tracking homeownership and mortgages in the 50 states and the District of Columbia for 2024. It contrasted those patterns with 2019 data, before the pandemic upended the economy."

"Remember, this five-year period saw mortgage rates which averaged 7.7% in the past half-century run below 3.5% for 40% of the time. But owners overall didn't see low rates as an enticement to borrow. Instead, California's mortgage-free homes increased by 16% over five years, compared with a 2% uptick among owners with mortgages. And it's no California quirk. American homeowners without mortgages also grew by 16%, while those with mortgages increased by 10%."

"Various factors power mortgage-free growth across the country. An aging population is paying off their home loans. A thriftiness movement also nudged some to live debt-free. And relocations from high-cost states to cheaper ones allowed some movers to buy new homes for cash. Additionally, the reduced tax deductibility of interest expenses made mortgages less desirable. And there are numerous wealthy families with the means to own a home without a mortgage."

Mortgage-free homeownership expanded substantially over a five-year span, with California's mortgage-free homes increasing 16% while owners with mortgages rose just 2%. Nationwide, homeowners without mortgages grew 16% compared with a 10% increase among mortgaged owners. Mortgage rates ran below 3.5% for 40% of the period despite a 7.7% half-century average, yet low rates did not spur widespread new borrowing. Contributing factors include an aging population paying off loans, a thriftiness movement favoring debt-free living, relocations enabling cash purchases, reduced tax deductibility of interest, and wealthy families buying without mortgages. California counted 2.6 million mortgage-free owners, trailing Texas and Florida.

Read at www.ocregister.com