Charlotteans have more mortgage debt than other homeowners

Proportionately more Charlotteans are encumbered by mortgage debt than homeowners in other major metropolitan areas, a new study by Zillow shows.

Nationally, about 29.3 percent of homeowners own their homes outright, meaning they don't have a mortgage, Zillow's analysis shows. That equates to about 21 million Americans nationally.

In Charlotte, 20 percent of homeowners are clear of mortgage debt, among the lowest rate out of the 30 cities Zillow tracks. Zillow chose the 30 cities based on population size.

Pittsburgh had the highest number of homeowners who were "free and clear" or mortgage debt, or 38.6 percent, followed by Tampa at 33.2 percent and New York at 29.7 percent.  Those on the bottom, in addition to Charlotte, are Denver with 18.5 percent, Las Vegas at 18.3 percent and Atlanta at 17.7 percent.

A number of factors influence the percentage, including median home values. Zillow found that areas with lower home values generally have higher outright homeownership rates, as smaller loans amounts are easier to pay back more quickly.

Zillow Chief Economist Dr. Stan Humphries said it is important to study which homeowners are free of a mortgage.

"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," he said.  "By determining where these homeowners are located, we can also gain insight into potential inventory and demand in those areas, as well.”

Wells Fargo & Co. senior economist Mark Vitner said people shouldn't be too concerned that relatively fewer Charlotteans are free of mortgage debt.

"This is not as worrisome as it looks," he said. "Charlotte is a relatively young city, with lots of newcomers. The population is largely made up of transplants that moved to the area during the past two decades. Many of these folks bought homes with 30-year or 15-year mortgages and have not been here long enough to pay off their mortgage."

"I would think many of the areas owning homes free and clear have older populations and little-to-no population growth. Look at Pittsburgh, Cleveland (29.4 percent) and St. Louis (27.2 percent).