New Orleans Is No. 1 Mortgage-Free Metro

Front of a house in New Orleans

by John Egan
January 23, 2017

Wouldn’t it be nice to live in your own home but not have to make a monthly mortgage payment? For many homeowners in the New Orleans, LA, metro area, that’s a pleasant reality.

A LawnStarter review of U.S. Census Bureau data indicates 4 of every 10 owner-occupied homes in the New Orleans metro area (41.15 percent) are mortgage-free. Among the 100 largest metro areas in the U.S., that’s the biggest share of mortgage-free homes, our review shows. No. 2 on the list is Pittsburgh, PA (41.12 percent), followed by Tampa-St. Petersburg, FL (39.96 percent) and Buffalo, NY (38.33 percent). Nationwide, about 35 percent of homeowners are mortgage-free, according to our data analysis.

The data comes from the Census Bureau’s 2011-15 American Community Survey.

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This home is on Laurel Street in the Uptown Historic District of New Orleans.
Photo: Latter & Blum

Richard Haase, president of Latter & Blum, a residential real estate firm with offices throughout Louisiana, offers a couple of reasons for the high number of mortgage-free homes in the New Orleans area.

One reason, Haase says, is that low interest rates in recent years have prompted some buyers to purchase homes with 15-year loans instead of 30-year loans, meaning these owners are paying off their loans in less time.

Another reason, according to Haase: Over the past decade or so -- especially since Hurricane Katrina battered the region in 2005 -- investors have made a significant number of home purchases without obtaining mortgages.

The Lower Ninth Ward of New Orleans still is recovering from Hurricane Katrina.
Photo: Federal Emergency Management Agency

Yet another reason can be found in the area of New Orleans hit hardest by Katrina -- the Lower Ninth Ward. According to research by The Data Center, which produces data about southeast Louisiana, the Lower Ninth Ward boasts some of the highest ownership rates in the Crescent City, and 65.4 percent of homeowners in the predominantly African-American neighborhood were mortgage-free in 2010.

“This high rate of mortgage-free and affordable homeownership in the [Lower 9th Ward] is an outgrowth of a rich history where families were able to purchase a city lot and build their own home, often over many years, but at a very low cost. These hand-built homes were often passed down over generations,” the Lower 9th Ward Homeownership Association says.

This home is on Valence Street in the Uptown Historic District of New Orleans.
Photo: Latter & Blum

In a 2013 study based on U.S. mortgage data, real estate marketplace Zillow found that areas with lower home values generally have higher rates of mortgage-free ownership, as smaller loans are easier to pay off in a relatively short amount of time.

For the New Orleans area in 2015, the median value of an owner-occupied home with a mortgage was $202,500, according to the U.S. Census Bureau, compared with $215,500 for the U.S. as a whole.

Zillow’s research also showed that 65- to 74-year-old homeowners were most likely to be mortgage-free (20.5 percent), followed by 74- to 84-year-old homeowners (17.9 percent). In 2015, nearly 14 percent of people living in the New Orleans area were 65 and over, compared with nearly 15 percent nationally.

To see which major metros have the most mortgage-free homes, check out the graphic below.

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Top Photo: Latter & Blum

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