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."

"Last year, California had 2.6 million owners without mortgages - 7% of the nation's 35 million. Only California's arch rivals had more: Texas at 3.2 million and Florida at 2.7 million. However, California's 16% growth in mortgage-free living from 2019 was only the 24th largest jump among the states. That's nowhere near No. 1 Idaho, at 27%. Texas was No. 21 at 17%, and Florida was No. 13 at 20%."

Over a five-year period ending in 2024, homeowners without mortgages grew significantly faster than those with mortgages in California and nationwide. Mortgage-free homes in California rose 16% while owners with mortgages increased just 2%. Nationally, mortgage-free homeowners grew 16% versus a 10% rise among mortgaged owners. The period included extended stretches of historically low mortgage rates, yet many owners did not borrow. Contributing factors include an aging population paying off loans, a movement toward debt-free living, relocations enabling cash purchases, reduced tax deductibility of interest, and wealthy families buying without mortgages. California had 2.6 million mortgage-free owners, behind Texas and Florida.

Read at The Mercury News