10 States With The Most Mortgage-Free Homeowners

Mortgages are a huge part of the lives of people in the U.S.A. and can be seen as a first step towards realizing your dream of having your own house. To simply define, a mortgage is a kind of legal agreement through which a bank, building society, etc. lends money at interest in exchange for taking the title of the debtor’s property. Once the mortgage is paid, the conveyance of title becomes legitimate and the house officially and legally belongs to you, in the complete sense. Keeping up with monthly mortgage payments and interest is one of the biggest hustles for homeowners and if you want to judge the standard of living of any city, checking the percentage of mortgage-free homeowners can be a good way to look at it.

This is because if you are able to fulfil your complete mortgage payments, it obviously shows a higher household income and a quality of life. The states with the most mortgage-free homeowners can be your ideal pick if you want to live your American Dream without the dark parts of it. We have made a list of 10 states with the most mortgage-free homeowners along with the possible reasons that made them get there. In case you are planning to buy a house and aim to get rid of the mortgage as soon as possible, you certainly should read this article till the end.

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Why Do People Take Mortgage Loans?

Now that we are talking about mortgage payments, this is one of the most obvious questions that might pop up in your head because if mortgage payments are such a burden why do Americans prefer mortgages over any other method? We are here to solve this doubt by listing for you all the benefits of taking mortgage loans:

  • Mortgage loans are available for longer tenures lasting up to 30 years and can be repaid in affordable monthly payments or EMIs.
  • The interest you pay on a mortgage loan is much lower than that of a personal loan.
  • Even if you had paid for your house, health emergencies can happen at any time and you must be aware of how expensive hospital bills can get. In case of such dire needs, you can mortgage your house and fund the medical emergency.
  • One of the most common reasons behind people putting up their houses for mortgages is to be able to pay for their children’s higher education.
  • Weddings are a pleasant experience which is also an expensive one. Many parents dream to pay for their children’s wedding and they put their house on mortgage to be able to pay for the same.
  • If you are an entrepreneur, we understand the value of business expansion. You can get the required funds for this purpose by putting your house on a mortgage.
  • Home renovations are an expensive affair and people prefer to adopt the route of mortgaging their house to get the upgrade.
  • One of the benefits of taking a mortgage loan is that it can be customized to suit your requirements and is a very convenient form of loan.
  • If you take any other kind of loan, you might even lose your house after a certain point in time and can be legally bound too but in the case of a mortgage, you continue to remain the legal owner of your property while using the funds from the loan to fulfill your needs.

10 States With The Most Mortgage-Free Homeowners

In the U.S., almost 64% of American households have a mortgage and the amount depends upon the type of home. An average American owes approximately $215,655 in mortgages every year. Paying off the house mortgage is no cake-walk but in the U.S., 38% of homes are free of mortgages which is a huge deal if you consider the economic circumstances of the past years. There are multiple states which have a high rate of mortgage-free homeowners promising you a higher quality of life. The 10 states with the most mortgage-free homeowners are as follows:

Mississippi

The absolutely stunning state of Mississippi is one which is not only surrounded by picturesque scenery but also is a homeowner’s paradise because of its affordable housing, low tax rates, and high median household income. In the state of Michigan, almost 50.9% of homeowners have paid off their mortgages. Mississippi is also a very affordable state where the median home value is $119,050.

With a state population of around 2,961,536, Mississippi is one of the lesser dense states in terms of its residents. The Hospitality State is one of the cheapest states to live in with a cost of living index score of 84.8 which is quite below the national average of 100. All the states where homeowners are able to pay off their mortgages are states where homeowners stay in the same property for a long period of time. Almost 50% of the homeowners in this state have been living in their homes 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 lesser time.

Louisiana

Louisiana is a southeastern U.S. state on the Gulf of Mexico. The Sugar State is historically known as an amalgamation of French, African, American, and French-Canadian influence, which can be reflected through its Creole and Cajun cultures. Louisiana, popularly regarded as the child of Mississippi, has a population of around 4,648,796 and the city of New Orleans is the state’s most loved city.

The Pelican State is on the list because almost 48.4% of the population of homeowners have successfully paid off their mortgage payments completely. Do not be wary of the comparatively high house pricing with an average median value of $203,222. Sure, it sounds like a lot, but in Louisiana, the average median household income is $49,469 with a whopping job market providing the homeowners with plenty of time and opportunities to be able to pay off their loans.

Also See: Moving To Louisiana

North Dakota

With the highest median household income of $64,894, North Dakota is cited here because the residents have sufficient income sources to be able to pay off their mortgages. The state of North Dakota is not only filled with the charming tales of its rich Scandinavian history but is also dominated by the marvelous Great Plains.

With a population of 770,221 and with agriculture being one of the most prominent sources of income for homeowners, almost 48% of the homeowners here have paid off their mortgages. If ‘organic’ and ‘natural’ is your way of life, North Dakota is a gorgeous state to start a life in. The housing is also extremely affordable with an average median home value of $259,960 due to which many homeowners stay in the same house for several years.

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Also See: Moving To North Dakota

New Mexico

New Mexico is not just a culturally astounding state but is also one of the states with the maximum percentage of homeowners who have paid off their mortgage payments. With a population of 2,109,093, New Mexico is one of the Mountain States of the southern Rocky Mountains. Known for its wonderful, rich culture and fancy resorts, New Mexico is rightfully known as the Land of Enchantment.

This land of enchantment shares the Four Corners region of the western U.S. with Utah, Colorado, and Arizona, and borders Texas to the east and southeast, Oklahoma to the northeast, and the Mexican states of Chihuahua and Sonora to the south. The state, rightfully named, has an enchanting median house value of $272,362 with an average median household income of $49,754. With almost 47% of homeowners having paid off their mortgages due to the affordable lifestyle and overall low cost of living, New Mexico can easily be the state for you to be able to live in your own house and dream of having it mortgage-free soon.

Also See: Moving To New Mexico

Arkansas

With an estimated population of 3.4 million, we have to admit, the state of Arkansas is a quaint one on the list. Known for its hot springs, gorgeous lakes, and stunning rivers, Arkansas can be your ideal state to begin a life in. With an average household income of $47,497 and an extremely cheap median house price of $183,825, the Little Rock can certainly prove to be your rock, if you’re planning on buying yourself a house here.

Almost 47% of the homeowners in the state have successfully paid off their mortgage loans completely which makes Arkansas one of the top states for mortgage-free homeowners. Arkansas is surrounded by nature and blissful greenery so not only does the state have affordable housing but wonderful living conditions too, making it an ideal state to purchase a house in.

Also See: Best Cities To Move To Start A New Life

Oklahoma

Globally known for American football, the state of Oklahoma can become the right state for homeowners too. With a population of around 4 million and a monthly average household income of $52,919, the Sooner State can soon become the place where you buy the house of your dreams.

Oklahoma has the oil and gas industry as one of the prime job markets making it easier for homeowners to have high-paying jobs. This is due to which almost 47% of the Oklahoman homeowners are living mortgage-free lives in their houses. Oklahoma also has a really low cost of living which adds to making the overall process quicker.

Alabama

With an average median home value of $189,976, the state of Alabama has a median household income of $50,536 which can be considered as one of the prime reasons behind it being in our list of 10 states with the most mortgage-free homeowners. The state of Alabama has a population of around 5.5 million and is certainly one of the populous states but almost 45% of the house owners have paid off their mortgage out of which the majority comes from the southern cities.

Though it is populated, Alabama has really low income taxes, low cost of living, and affordable housing which is why homeowners have successfully paid off their debts and prefer to buy a house in for the long run. You can be one of them too if the state of Alabama is Mama approved!

Montana

The state of Montana is on the list with an average monthly median household income of $54,970. The state of Montana has an approximate population of 1.14 million and almost 44.7% of homeowners have paid off their mortgages. Low population rates and a higher household income together serve as the perfect recipe for an ideal state and Montana is exactly that.

The state of Montana is a western state which is known for its diverse terrain ranging from the Rocky Mountains to the Great Plains. With its blossoming high-tech job market and a median home value of $419,202, Montana can very well be an ideal state for you to buy a house in for the long term because the majority of homeowners in the state have been living on the same property for over 30 years.

West Virginia

West Virginia is a superior state in terms of many things and housing affordability is only one of them. The median house value in the state of West Virginia is approximately $119,600 which is comparatively very cheap. Over 53.6% of homeowners have homes that are mortgage-free in the state of West Virginia. One major factor behind this high percentage is the fact that homeowners stay consistent for a long period of time (approximately 20 years) in the house due to which the debt is paid over the course of time.

The state of West Virginia has a population of 1.795 million which is also less when compared to various other states in the U.S. so you can have a comparatively peaceful living experience here. Mortgage payments are easier here as homeowners pay just $690 for taxes speeding up the process.

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South Dakota

We already mentioned North Dakota and South Dakota is not too far off in the list. With a small population of 1.12 million and a monthly median household income of $58,275, South Dakota is a small state where you can live out your big dreams. The housing is also comparatively a lot affordable in the state of South Dakota with a median average home price of $272,218.

Just like North Dakota, South Dakota is also rich in agriculture and nature and almost 45% of the homeowners have paid off their mortgage due to its low cost of living and affordable housing. Other than this, South Dakota is also a state with no income tax so the dream of being able to pay off your mortgage could become a reality very soon.

Mortgaging is no child’s play. It involves plenty of intensive research and is a decision that needs to be deliberated quite well. However, choosing a state that is mortgage-friendly can make the process of owning a home a lot easier. We hope that after reading about these 10 states you feel confident of being able to live a mortgage-free life. We sincerely hope that you soon get to be a happy statistic when we talk about mortgage-free homeowners in the future so go ahead and get the house of your dreams.

FAQs On States With The Most Mortgage Free Homeowners

What Is The Best State To Buy A Home In?

What is the best for you will always be entirely subjective on the basis of the factors you are looking at but in terms of affordability and inexpensive housing, the state of West Virginia can be your ideal pick. West Virginia has one of the cheapest median house values in the country with a median house price of $119,600.

What State Has The Highest House Prices?

The coolest state with beaches and an extremely happening culture, the state of Hawaii also excels when it comes to the highest house prices. Whether you decide to buy a house or rent one, Hawaii will not be cheap. Hawaii has the highest median home price of $638,389 and also has the third-highest average monthly rent in the U.S. at $2,334 per month, so living in Hawaii will certainly not be a breeze in terms of housing payments.

How Many Houses Are Paid Off In The U.S.?

Paying off the mortgage loan is a big deal and almost 38% of U.S. homeowners completely own their houses and are free of mortgage payments. The last decade has seen a 5.6% increase in homeowners paying off their mortgages so the numbers are in your favor.

Also Read: How To Refinance Your Mortgage? | Things You Need to Be Pre-approved for a Mortgage | Top Out of State Moving Companies in the US

Written by


Rostislav Shetman is the founder of 9Kilo Moving. He has been in the moving and relocation industry for more than 25 years, making him an expert in his field. Rostislav started as a helper, dispatcher and driver and has worked his way up to owning his own company. He takes great pride in his work and enjoys helping people relocate across the United States of America. When he's not working, Rostislav enjoys spending time with his family and friends. They are the light of his life and bring him happiness every day.