Almost 21 million Americans, or 29.3 percent of homeowners, own their homes outright, unencumbered by a mortgage, according to a recent Zillow analysis of mortgage data.

Analyzing data through the third quarter of 2012, Zillow found that 20.6 million homeowners nationwide own their homes free of mortgage debt.

The study surveyed the nation’s 30 largest metro areas. The cities with the highest percentages of free-and-clear homeowners were: Pittsburgh, 38.6 percent; Tampa, 33.2 percent; New York, 29.7 percent; Cleveland, 29.4 percent; and Miami, 28.9 percent.

The areas with the lowest percentages were: Washington, D.C., 15.5 percent; Atlanta, 17.7 percent; Las Vegas, 18.3 percent; Denver, 18.5 percent; and Charlotte, 20 percent.

Median home values were a prominent factor into the number of free-and-clear homeowners in a given area, Zillow reported. Areas with lower home values generally have higher outright homeownership rates, since smaller loan amounts are easier to pay back more quickly.

Demographic factors, like the age and credit rating of primary borrowers, also influenced free-and-clear homeownership rates. According to Zillow, 65- to 74-year-olds are most likely to be free-and-clear at 20.5 percent, followed by 74- to 84-year-olds at 17.9 percent. This is attributed to the fact that the longer someone owns a home, the longer they have to pay off their mortgage. When examining free-and-clear ownership rates as a percentage of homeowners in various age groups, 34.5 percent of 20- to 24-year-old homeowners are free of mortgages, the firm reported. However, 20- to 24-year-old homeowners make up a smaller percentage of all homeowners than older demographics.

Among homeowners who own their homes outright, 44 percent have a high VantageScore – representing their credit rating – between 800 and 900. Only 15.5 percent of homeowners with the highest credit rating of 900-990 are free-and-clear.

“So far we have used our unique data on how much homeowners owe on their homes primarily to identify underwater and delinquent groups of homeowners,” Zillow Chief Economist Dr. Stan Humphries said in a statement. “But looking at those homeowners who are free-and-clear is important, too. Homeowners unencumbered by a mortgage may be more flexible than indebted homeowners, and therefore more apt or willing to list their homes or enter the market for a new property. By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas, as well.”

Commerical Record 1/10/13