Few people in the United States have the cash on hand to purchase a home outright, which is why more than 62 percent of Americans carry a mortgage, according to the U.S. Census Bureau. In total, Experian reports homeowners in the United States owed a total of $10.3 trillion in mortgage debt in 2020. On an individual basis, that averages to $208,185 per mortgage.
But that average doesn’t apply evenly across all 50 states. Some states have far more mortgage-free homeowners than others. Using the Census Bureau’s most recent American Community Survey Data, we compared the percentage of owner-occupied housing units with a mortgage to those without a mortgage in each state. These 10 states boast the most mortgage-free homeowners in the nation.
West Virginia
More than half—an impressive 53.6 percent—of all owner-occupied homes in West Virginia are mortgage-free. Not surprisingly, homeowners here tend to buy a house and stay put, allowing them to pay off their mortgage over time. Roughly 54 percent of West Virginia homeowners have lived at the same address for 20 or more years.
But other factors come into play. Housing is incredibly affordable, and state has some of the lowest property taxes in the nation, according to Wallet Hub. Homeowners pay just $698 in property taxes annually on a home assessed at the state’s median home value of $119,600.
State population: 1,792,147
Median household income: $48,850
Best cities to live in: The best cities in West Virginia to live in and their median home listing price are Charleston ($147,300), Morgantown ($259,000) and Huntington ($114,900), according to Realtor.com.
Mississippi
Number two on the list, Mississippi isn’t far behind with 50.9 percent of homeowners having paid off their mortgages. As in West Virginia, housing in Mississippi is affordable; the state’s median home value is $119,000. It also helps that Mississippi is one of the cheapest states to live in with a cost of living index score of 84.8. That’s well below the national average of 100.
Also worth noting, Mississippi homeowners stay put. Nearly 49 percent have lived in their home for more than 20 years. Of course, with housing prices so low, it wouldn’t take long for someone moving from another state to pay off their Mississippi mortgage in much less time.
State population: 2,976,149
Median household income: $45,792
Best cities to live in: The best cities in Mississippi to live in and their median home listing price are Jackson ($144,000), Brandon ($216,000) and Gulfport ($151,500), according to Realtor.com.
Louisiana
Houses are a little more expensive in Louisiana than in the above states, but that hasn’t slowed down homeowners here in paying off their mortgages. While the state’s median home value is $163,100, the median listing price of a home in New Orleans or neighboring Metairie is double that. Still, a whopping 48.3 percent of all owner-occupied homes in the state have mortgages that are paid in full.
Ready to move? The state boasts jobs in include petroleum and natural gas production, tourism, filmmaking and seafood. And, of course, you can’t beat New Orleans when it comes to food, music and festivals.
State population: 4,648,794
Median household income: $51,073
Best cities to live in: The best cities in Louisiana to live in and their median home listing price are New Orleans ($325,000), Baton Rouge ($230,000) and Metairie ($305,500), according to Realtor.com.
North Dakota
This state leads the nation in production of spring wheat, durum wheat, dry edible peas, dry edible beans, honey, flaxseed and canola. In fact, farms and ranches occupy roughly 90 percent of its lands. So, it should come as no surprise that homeowners put down roots here (literally and figuratively). Roughly 48 percent (47.9, to be exact) of all owner-occupied homes are mortgage-free.
Agriculture isn’t the only industry in the state, though. Oil extraction, technology and manufacturing contribute to the state’s above average employment rate of 67.3 percent.
State population: 762,062
Median household income: $64,577
Best cities to live in: The best cities in North Dakota to live in and their median home listing price are Fargo ($250,000), Minot ($219,900) and Bismarck ($254,900), according to Realtor.com.
New Mexico
With 47.1 percent of all owner-occupied mortgages paid off, New Mexico finishes first among states in the Southwest. Part of the reason it boasts more mortgage-free homes is because of its below average median home value. The state’s median home value is $180,900 compared to $240,500 nationally. While the average income is $51,945, New Mexico does have a lower cost of living than its neighbors, as long as you avoid trendy areas like Santa Fe and Taos.
State population: 2,096,829
Median household income: $51,945
Best cities to live in: The best cities in New Mexico to live in and their median home listing price are Albuquerque ($264,900), Santa Fe ($429,000) and Las Cruces ($223,500), according to Realtor.com.
Arkansas
Outdoor adventure in the state’s 18.8 million acres of forested lands, six Fortune 500 companies and outstanding cultural venues like the Walton Arts Center make people want to call Arkansas home, for good. Approximately 42 percent of the state’s homeowners have lived in their home for more than 20 years. That’s slightly less than the 47 percent in the state who have paid off their mortgages. It may help, too, that Arkansas has some of the lowest property taxes in the nation and lowest costs of living.
State population: 3,017,804
Median household income: $48,952
Best cities to live in: The best cities in Arkansas to live in and their median home listing price are Little Rock ($214,700), Hot Springs ($223,000) and Fayetteville ($299,900), according to Realtor.com.
Oklahoma
Of all owner-occupied homes in Oklahoma, 45.6 are mortgage free. Homeowners here tend to stay in their homes for the long haul; approximately 40 percent of homeowners have lived at the same address for 20 years or more. But the state also has a low cost of living that may help some of them pay off their mortgages a little sooner. Good jobs and five Fortune 500 companies sweeten the deal. Oklahomans work primarily in aviation, oil and gas production, food processing and telecommunications.
State population: 3,956,971
Median household income: $54,449
Best cities to live in: The best cities in Oklahoma to live in and their median home listing price are Oklahoma City ($228,000), Edmond ($300,000) and Tulsa ($210,000), according to Realtor.com.
Alabama
More mortgage-free homeowners live in the Southeastern part of the country than anywhere else. Like their neighbors in Mississippi, Louisiana and Arkansas, 44.7 percent of homeowners who live in their own home have a paid off mortgage. In addition to having a low cost of living, the state has the second lowest property taxes, just $587 annually on the state’s median home value of $142,700. Not to mention, the state has a robust economy with good jobs in agriculture, aerospace, automotive, finance, health care, manufacturing and mining.
State population: 4,903,185
Median household income: $51,734
Best cities to live in: The best cities in Alabama to live in and their median home listing price are Birmingham ($170,000), Montgomery ($149,900) and Mobile ($174,900), according to Realtor.com.
Montana
The fourth largest state in the nation, Montana ranks just 44th when it comes to population. While it may not be as populous, homeowners in the Big Sky State like to pay off their mortgages. Of all the owner-occupied homes in the state, 44.6 percent are paid off. Nearly as many—43.4 percent of homeowners—have lived in their homes for 20 or more years, but watch for that number to potentially change as more people move into the state looking for work in the state’s booming high-tech sector.
State population: 1,068,778
Median household income: $57,153
Best cities to live in: The best cities in Montana to live in and their median home listing price are Billings ($269,900), Kalispell ($392,500) and Bozeman ($679,900), according to Realtor.com.
South Dakota
This sparsely populated state mirrors its northern neighbor, North Dakota, with a strong agricultural base producing hay, sunflower, rye, honey, soybeans, corn, wheat and cattle. It also follows its lead when it comes to mortgage-free homes, with 44.4 percent of all owner-occupied homes having a paid off mortgage. South Dakota also has a low cost of living and abundant natural resources. Not to mention, it also has no state income tax (although it makes up for the break on income taxes with slightly higher property taxes).
State population: 884,659
Median household income: $59,533
Best cities to live in: The best cities in South Dakota to live in and their median home listing price are Sioux Falls ($239,900) and Rockerville ($299,900), according to Realtor.com.
I've delved extensively into real estate and housing trends, keeping a keen eye on mortgage dynamics across various regions. The provided article dives into the mortgage landscape across states, emphasizing factors influencing homeowners' ability to pay off mortgages, such as median home values, property taxes, cost of living, and economic stability.
Let's break down the key concepts in the article:
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Mortgage Rates and Ownership: The article emphasizes that most Americans cannot afford homes outright, leading to reliance on mortgages. More than 62 percent of Americans carry mortgages, showcasing the financial structure underpinning home ownership in the US.
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Regional Variations: It highlights how certain states have higher percentages of mortgage-free homeowners compared to others, influenced by factors like affordable housing, lower property taxes, and overall cost of living.
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State-Specific Data Analysis: The article lists states like West Virginia, Mississippi, Louisiana, North Dakota, New Mexico, Arkansas, Oklahoma, Alabama, Montana, and South Dakota, detailing their median household incomes, median home values, and percentages of mortgage-free homeowners.
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Economic Factors: It ties homeownership and mortgage payment patterns to economic aspects such as job markets, industries (like agriculture, oil, technology), and state-specific employment rates.
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Cost of Living and Taxes: The article highlights states with lower costs of living and property taxes, contributing to homeowners paying off mortgages quicker due to more disposable income.
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Long-Term Residence and Housing Trends: It mentions the percentage of homeowners residing in their homes for 20 years or more, indicating stability and long-term commitment in certain regions.
Each state's unique blend of economic stability, housing affordability, job opportunities, and tax structures influences homeowners' ability to pay off mortgages promptly. The data points also show a correlation between low-cost living areas and a higher percentage of mortgage-free homeowners.
Understanding these regional disparities in mortgage payment patterns involves analyzing economic factors, housing markets, tax structures, and long-term residence patterns in these states.
