LendingTree Reveals the Most Free & Clear Cities in America
CHARLOTTE, N.C., September 26, 2018 – LendingTree®, the nation’s leading online loan marketplace, today released its study on which cities have the highest share of homeowners without mortgage debt obligations, ranking U.S. cities by the proportion of such homeowners who are free and clear.
To assess “free and clear” homeowners, analysts used LendingTree’s proprietary database of almost all homes in the United States to calculate the proportion of homes with zero mortgage debt in each city. They also calculated the median value of mortgaged and non-mortgaged properties and their ratio.
Key findings:
The top free and clear cities get there by different means:
- No. 1 Detroit arrived at the top spot for a not-so-great reason: mortgage lenders have historically viewed housing in the city as risky and, as a result, there are fewer homeowners here. This was often driven by discriminatory lending practices which excluded many Detroit residents from the mortgage market.
- Miami ranks second and is a top destination for foreign buyers. These buyers are often wealthy and therefore pay cash for their home purchases.
- Third place Las Vegas has a high ratio of homes owned by cash-ready investors. Persistent migration inflows mean potential landlords find a ready market and homes at affordable prices.
- The least free and clear cities are Washington D.C., Virginia Beach and Seattle.
- Washington D.C. and Seattle have some of the highest-priced homes in the nation. Even with the abundance of high-paying jobs in these cities, it’s difficult to purchase a home without a mortgage.
- Virginia Beach has one of the highest rates of military households in the country. It also has more than its share of homeowners, thanks to the accessibility of mortgages from the Department of Veterans Affairs (VA). These typically younger mortgage holders are still paying off the loans, making Virginia Beach one of the least free and clear cities.
- A curious result is that six cities in California are among the top 20 free and clear cities, despite relatively high home prices in the state. California’s property tax laws discourage homeowners from moving, so many have long tenures and have had the opportunity to pay down their mortgages.
“As home prices rise, these homeowners receive the full benefits and see their wealth accumulate,” said Tendayi Kapfidze, Chief Economist at LendingTree. “This wealth accumulation boosts consumer spending via the wealth effect, making for more dynamic economies.”
Kapfidze continued, “Homeowners who do not have mortgage debt can decide if and how they want to access this wealth, perhaps by taking out a loan to address life needs, and are generally better able to absorb financial shocks. The Federal Reserve’s measure of how much wealth households have in real estate equity has climbed from a $6-trillion level nine years ago to about $15 trillion in 2018.”
| Rank | Metro | Percent of Free & Clear Homes | Median Value of Non-mortgaged ("Free & Clear") Homes | Median Value of Mortgaged Homes |
| 1 | Detroit | 55% | $103,000 | $206,000 |
| 2 | Miami | 52% | $236,000 | $303,000 |
| 3 | Las Vegas | 48% | $231,000 | $252,000 |
| 4 | Birmingham, Ala. | 46% | $127,000 | $188,000 |
| 5 | Tampa, Fla. | 45% | $166,000 | $219,000 |
| 6 | Oklahoma City | 45% | $131,000 | $162,000 |
| 7 | San Diego | 44% | $580,000 | $561,000 |
| 8 | San Francisco | 43% | $935,000 | $874,000 |
| 9 | Orlando, Fla. | 42% | $191,000 | $238,000 |
| 10 | Phoenix | 42% | $232,000 | $254,000 |
| 11 | Pittsburgh | 42% | $135,000 | $170,000 |
| 12 | Kansas City, Mo. | 42% | $156,000 | $200,000 |
| 13 | Memphis, Tenn. | 42% | $113,000 | $170,000 |
| 14 | Buffalo, N.Y. | 42% | $128,000 | $160,000 |
| 15 | Los Angeles | 42% | $660,000 | $611,000 |
| 16 | Cleveland | 41% | $112,000 | $154,000 |
| 17 | San Jose, Calif. | 41% | $1,134,000 | $1,032,000 |
| 18 | Sacramento, Calif. | 40% | $388,000 | $395,000 |
| 19 | Riverside, Calif. | 39% | $319,000 | $353,000 |
| 20 | Jacksonville, Fla. | 39% | $156,000 | $209,000 |
| 21 | Atlanta | 39% | $174,000 | $219,000 |
| 22 | New York | 38% | $458,000 | $465,000 |
| 23 | Cincinnati | 38% | $146,000 | $178,000 |
| 24 | Milwaukee | 37% | $201,000 | $212,000 |
| 25 | Charlotte, N.C. | 36% | $176,000 | $223,000 |
| 26 | Indianapolis | 36% | $104,000 | $155,000 |
| 27 | Chicago | 35% | $210,000 | $244,000 |
| 28 | Columbus, Ohio | 35% | $151,000 | $202,000 |
| 29 | Minneapolis | 35% | $254,000 | $271,000 |
| 30 | St. Louis | 35% | $128,000 | $181,000 |
| 31 | Houston | 34% | $177,000 | $225,000 |
| 32 | New Orleans | 34% | $176,000 | $215,000 |
| 33 | Salt Lake City | 34% | $316,000 | $306,000 |
| 34 | San Antonio | 34% | $183,000 | $210,000 |
| 35 | Nashville, Tenn. | 33% | $219,000 | $259,000 |
| 36 | Louisville, Ky. | 33% | $142,000 | $183,000 |
| 37 | Dallas | 33% | $192,000 | $249,000 |
| 38 | Austin, Texas | 31% | $278,000 | $297,000 |
| 39 | Providence, R.I. | 29% | $263,000 | $274,000 |
| 40 | Raleigh, N.C. | 29% | $208,000 | $241,500 |
| 41 | Denver | 29% | $385,000 | $403,000 |
| 42 | Portland, Ore. | 28% | $387,000 | $386,000 |
| 43 | Philadelphia | 28% | $186,000 | $246,000 |
| 44 | Baltimore | 27% | $237,000 | $296,000 |
| 45 | Boston | 26% | $473,000 | $468,000 |
| 46 | Richmond, Va. | 25% | $223,000 | $244,000 |
| 47 | Hartford, Conn. | 24% | $211,000 | $234,000 |
| 48 | Washington | 23% | $392,000 | $409,000 |
| 49 | Virginia Beach, Va. | 22% | $216,000 | $234,000 |
| 50 | Seattle | 22% | $447,000 | $480,000 |
To view the full report, visit: https://www.lendingtree.com/home/mortgage/most-free-and-clear-cities-in-america/.
About LendingTree
LendingTree (NASDAQ: TREE) is the nation's leading online marketplace that connects consumers with the choices they need to be confident in their financial decisions. LendingTree empowers consumers to shop for financial services the same way they would shop for airline tickets or hotel stays, comparing multiple offers from a nationwide network of over 500 partners in one simple search, and can choose the option that best fits their financial needs. Services include mortgage loans, mortgage refinances, auto loans, personal loans, business loans, student refinances, credit cards and more. Through the My LendingTree platform, consumers receive free credit scores, credit monitoring and recommendations to improve credit health. My LendingTree proactively compares consumers' credit accounts against offers on our network, and notifies consumers when there is an opportunity to save money. In short, LendingTree's purpose is to help simplify financial decisions for life's meaningful moments through choice, education and support. LendingTree, LLC is a subsidiary of LendingTree, Inc. For more information, go to www.lendingtree.com, dial 800-555-TREE, like our Facebook page and/or follow us on Twitter @LendingTree.