Washington
D.C.; Denver, CO.;
Raleigh, N.C.; Virginia Beach, VA; and Portland Ore., markets lead the top 5 with the
highest share of mortgaged homeowners
SANTA
CLARA, Calif., Oct. 8, 2024
/PRNewswire/ -- As the Federal Reserve begins lowering mortgage
rates, markets with a high percentage of owner occupied homes with
a mortgage stand to see the most changes in their real estate
market according to a new study from
Realtor.com®. The effect
of lower mortgage rates will differ across markets based on
mortgage usage and homeowners in Washington D.C., Denver, CO., Raleigh, N.C., Virginia Beach, Va and Portland Ore., might be more sensitive to the
impact of lower rates, given the high utilization of
mortgages.
"Having a mortgage with a low interest rate is a fantastic
benefit to existing homeowners, but sometimes being in a great
position can limit your options. Although mortgage rates have
eased, market rates continue to exceed current rates for most
homeowners keeping them locked in 'golden handcuffs,'" said
Danielle Hale, chief economist,
Realtor.com®. "In markets like Washington D.C. and Denver, Colorado, where almost 75% of
owner-occupied homes have a mortgage, changes in market rates are
likely to factor into buying and selling decisions for more
homeowners. As mortgage rates decline, real estate sales activity
is expected to pick up in these areas."
Following the Fed's announcement of a big rate cut in September,
we expect mortgage rates to stay in the low 6% range through the
end of the year, with further declines potentially reaching the
high 5% range by next spring. These lower rates will offer some
relief to homebuyers who have struggled with high rates in recent
years, likely encouraging more buyers to return to the market.
Metros with the highest share of owner occupied homes with a
mortgage
- Washington-Arlington-Alexandria, DC-Va.-Md.-W.V. - 74.7%
- Denver-Aurora-Lakewood,
Colo. - 72.4%
- Raleigh-Cary, N.C. - 72.0%
- Virginia Beach-Norfolk-Newport
News, Va.-N.C. - 71.0%
- Portland-Vancouver-Hillsboro,
Ore.-Wa. - 69.8%
- Baltimore-Columbia-Towson,
Md. - 69.5%
- Seattle-Tacoma-Bellevue,
Wash. - 69.4%
- Atlanta-Sandy Springs-Alpharetta, Ga. - 69.4%
- Indianapolis-Carmel-Anderson,
Ind. - 69.0%
- San Diego-Chula Vista-Carlsbad, Calif. - 68.9%
Markets with a higher share of outright ownership could exhibit
a degree of insulation from the impact of lower mortgage rates.
Notably, New Orleans, La. stood
out with the highest share of homeowners who own their homes
outright among the largest 50 markets at 45.8%.
Metros with the highest share of owner occupied homes without
a mortgage
- New Orleans-Metairie, La. - 45.8%
- Buffalo-Cheektowaga, N.Y. - 45.2%
- Pittsburgh, Pa. - 45.2%
- Miami-Fort Lauderdale-Pompano Beach, Fla. - 43.8%
- Tampa-St. Petersburg-Clearwater, Fla. - 42.9%
- Detroit-Warren-Dearborn,
Mich. - 41.7%
- Birmingham-Hoover, Ala. - 41.5%
- Houston-The Woodlands-Sugar
Land, Texas - 41.2%
- Oklahoma City, Okla. -
41.0%
- Cleveland-Elyria, Ohio - 40.5%
Age and High Homeownership Rates Also Create More Insulated
Markets
Markets with higher homeownership rates tend to have
a greater share of outright ownership. Additionally, there is a
strong correlation between a larger proportion of older homeowners
(aged 65 and above) and the prevalence of outright
homeownership.
In markets with elevated homeownership rates, individuals
typically purchase homes at a younger age. As property values
appreciate over time, homeowners can leverage the accumulated
equity to either refinance their mortgages or sell and downsize,
avoiding the need for new mortgage debt. This trend is particularly
beneficial for older homeowners, who have had more time to benefit
from both home value appreciation and equity growth
Metro Areas Where Mortgages are Most Common
|
Metro
|
% of Owner
Occupied Homes
With A
Mortgage
|
% of Owner Occupied
Homes
Without A
Mortgage
|
|
Washington-Arlington-Alexandria,
DC-VA-MD-WV
|
74.7 %
|
25.3 %
|
|
Denver-Aurora-Lakewood,
CO
|
72.4 %
|
27.6 %
|
|
Raleigh-Cary,
NC
|
72.0 %
|
28.0 %
|
|
Virginia
Beach-Norfolk-Newport News, VA-NC
|
71.0 %
|
29.0 %
|
|
Portland-Vancouver-Hillsboro, OR-WA
|
69.8 %
|
30.2 %
|
|
Baltimore-Columbia-Towson, MD
|
69.5 %
|
30.5 %
|
|
Seattle-Tacoma-Bellevue, WA
|
69.4 %
|
30.6 %
|
|
Atlanta-Sandy
Springs-Alpharetta, GA
|
69.4 %
|
30.6 %
|
|
Indianapolis-Carmel-Anderson, IN
|
69.0 %
|
31.0 %
|
|
San Diego-Chula
Vista-Carlsbad, CA
|
68.9 %
|
31.1 %
|
|
Minneapolis-St.
Paul-Bloomington, MN-WI
|
68.9 %
|
31.1 %
|
|
Sacramento-Roseville-Folsom, CA
|
68.9 %
|
31.1 %
|
|
Charlotte-Concord-Gastonia, NC-SC
|
68.7 %
|
31.3 %
|
|
Riverside-San
Bernardino-Ontario, CA
|
68.6 %
|
31.4 %
|
|
Columbus, OH
|
68.3 %
|
31.7 %
|
|
Richmond, VA
|
68.1 %
|
31.9 %
|
|
Los Angeles-Long
Beach-Anaheim, CA
|
67.9 %
|
32.1 %
|
|
San
Francisco-Oakland-Berkeley, CA
|
67.7 %
|
32.3 %
|
|
Boston-Cambridge-Newton, MA-NH
|
67.6 %
|
32.4 %
|
|
Nashville-Davidson--Murfreesboro--Franklin,
TN
|
66.6 %
|
33.4 %
|
|
Las
Vegas-Henderson-Paradise, NV
|
66.5 %
|
33.5 %
|
|
Austin-Round
Rock-Georgetown, TX
|
66.3 %
|
33.7 %
|
|
San
Jose-Sunnyvale-Santa Clara, CA
|
65.7 %
|
34.3 %
|
|
Phoenix-Mesa-Chandler,
AZ
|
65.6 %
|
34.4 %
|
|
Providence-Warwick,
RI-MA
|
65.5 %
|
34.5 %
|
|
Cincinnati,
OH-KY-IN
|
65.5 %
|
34.5 %
|
|
Milwaukee-Waukesha,
WI
|
64.9 %
|
35.1 %
|
|
Chicago-Naperville-Elgin, IL-IN-WI
|
64.1 %
|
35.9 %
|
|
Hartford-East
Hartford-Middletown, CT
|
64.0 %
|
36.0 %
|
|
Jacksonville,
FL
|
64.0 %
|
36.0 %
|
|
St. Louis,
MO-IL
|
63.6 %
|
36.4 %
|
|
Kansas City,
MO-KS
|
63.6 %
|
36.4 %
|
|
Philadelphia-Camden-Wilmington,
PA-NJ-DE-MD
|
63.6 %
|
36.4 %
|
|
Louisville/Jefferson
County, KY-IN
|
63.4 %
|
36.6 %
|
|
Orlando-Kissimmee-Sanford, FL
|
63.3 %
|
36.7 %
|
|
Dallas-Fort
Worth-Arlington, TX
|
62.8 %
|
37.2 %
|
|
Memphis,
TN-MS-AR
|
62.2 %
|
37.8 %
|
|
New York-Newark-Jersey
City, NY-NJ-PA
|
61.0 %
|
39.0 %
|
|
San Antonio-New
Braunfels, TX
|
60.2 %
|
39.8 %
|
|
Rochester,
NY
|
59.6 %
|
40.4 %
|
|
Cleveland-Elyria,
OH
|
59.5 %
|
40.5 %
|
|
Oklahoma City,
OK
|
59.0 %
|
41.0 %
|
|
Houston-The
Woodlands-Sugar Land, TX
|
58.8 %
|
41.2 %
|
|
Birmingham-Hoover,
AL
|
58.5 %
|
41.5 %
|
|
Detroit-Warren-Dearborn, MI
|
58.3 %
|
41.7 %
|
|
Tampa-St.
Petersburg-Clearwater, FL
|
57.1 %
|
42.9 %
|
|
Miami-Fort
Lauderdale-Pompano Beach, FL
|
56.2 %
|
43.8 %
|
|
Pittsburgh,
PA
|
54.8 %
|
45.2 %
|
|
Buffalo-Cheektowaga,
NY
|
54.8 %
|
45.2 %
|
|
New Orleans-Metairie,
LA
|
54.2 %
|
45.8 %
|
|
Data source: 2023
ACS 1-Year Estimate
|
About
Realtor.com®
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open real estate marketplace built for everyone.
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estate more than 25 years ago. Today, through its website and
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consumers, empowering more people to find their way home by
breaking down barriers, helping them make the right connections,
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for business growth, offering consumer connections and branding
solutions that help them succeed in today's on-demand world.
Realtor.com® is operated by News Corp [Nasdaq:
NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. For more
information, visit Realtor.com®.
Media Contact
Mallory
Micetich, press@realtor.com
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