More American households are owning their homes free and clear with the burden of paying a mortgage out of the picture, according to a new data analysis from Zillow, which reveals that 37% of homes in 2017 no longer had mortgages to pay.
Older homeowners especially are making headway on mortgage debt. Forty-one percent of homes owned by Baby Boomers were mortgage-free in 2017.
Baby Boomers who are in the 55-to-69 age group comprise about 33% of all homeowners and have had many years to pay off their mortgages and build wealth. There are almost twice as many Baby Boomer homeowners (25,661,552) as there are Millennial homeowners in the 25-to-39 age group (12,662,948).
Sixty-eight percent of adults 70 and older are mortgage-free, while 15.9% of Millennials are free and clear of mortgage payments. For younger homeowners, there are pros and cons to paying off a mortgage early, so it’s important to look at the big picture and trade-offs.
Zillow economist Jeff Tucker said it is becoming more prevalent for older adults to own their homes outright after paying off mortgages. While many Baby Boomers have a strong preference to age in place, Tucker said patterns strongly suggest a large majority of this age cohort will age out of homeownership, and a large number of Millennials who are renters will become homeowners.
“That’s assuming Baby Boomers will behave like previous generations as they age,” said Tucker. “But there is always a question of changing trends and whether this generation will behave a bit differently.”