We are all too familiar with the constant media reports that state that approximately one third of home owners are “upside down” or “underwater” on their mortgage. This is when they owe more on their mortgage than what their home is worth. As home prices have been steadily increasing, these people are less “underwater” than a year ago but they are still essentially stuck in their current property.
But a new report by Zillow shows that one third of all homes are owned “Free and Clear” with no mortgage at all.
Demographics, home prices and geographical location all seem to play into “free-and-clear” home ownership, according to Zillow’s survey. Obviously, the longer someone owns a home, the more likely they are to have paid off a mortgage. When looking at free-and-clear ownership rates as a percentage of homeowners in various age groups, however, Zillow found 34.5 percent of 20- to 24-year-old homeowners are free of mortgages.
This represents an upwardly mobile block of homeowners that can sell their homes and purchase a new one.