Why 40% of U.S. homeowners have no mortgage—and the number keeps growing

Core Insights - The percentage of mortgage-free owner-occupied housing units in the U.S. has reached a record high of 40.3%, up from 39.8% in 2023, continuing a trend of annual increases since 2010 when it was 32.8% [1] Demographics and Trends - The rise in mortgage-free homeownership is largely driven by demographics, with older homeowners being more likely to own their homes outright. As the baby boomer generation ages, the share of mortgage-free homeowners has increased, with 54% of the 35 million mortgage-free homeowners being 65 years or older [2] - Individuals aged 65 and older represent over a third (34.1%) of current U.S. homeowners, and among this age group, 64% own their primary homes free and clear [3] Regional Variations - There is significant regional variation in mortgage-free status, with areas that have lower home values and a higher proportion of older populations showing a higher percentage of homeowners without mortgages [4] Metropolitan Insights - Among the 200 largest U.S. metropolitan areas, the highest percentages of mortgage-free homeowners are found in: - McAllen, TX: 61.8% - Brownsville, TX: 57.8% - Beaumont, TX: 57.1% - Kingsport, TN: 56.2% - Longview, TX: 55.8% - Conversely, the lowest percentages are in: - Washington, DC: 26.4% - Provo, UT: 27.0% - Denver, CO: 27.1% - Greeley, CO: 27.2% - Ogden, UT: 28.8% [5] Future Outlook - In the coming years, it is anticipated that more equity products, such as reverse mortgages, will emerge and expand as older mortgage-free homeowners seek to access the equity built in their homes without selling [6]