36% of Chicago-area homes are mortgage-free
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There's a growing share of Chicagoland homes without mortgages.
Why it matters: This is a group of homeowners who aren't worrying about high mortgage rates.
By the numbers: 36% of Chicago metro-area homes were owned outright in 2022, up from 33.4% in 2017, according to the latest census data.
- That's compared to nearly 40% nationally, the highest share since 2005.
Between the lines: Many free-and-clear owners are baby boomers who refinanced their mortgages when rates were lower, Bloomberg reports.
- Meanwhile, all-cash shoppers have made up a growing share of the homebuying market.
Zoom in: Glen Ellyn homeowner Pamela Schumacher tells Axios that she and her husband paid off their mortgage early, because "Why pay money to the bank?" She also wanted to be debt-free going into retirement.
- That financial freedom has allowed them to travel, keep saving and pay off their kids' student loans.
Be smart: "If people derive some intrinsic happiness out of paying off their mortgage because it reduces their stress, then that has value," Michael Roberts, a Wharton School finance professor, tells Bloomberg.
- There can be a psychological perk to paying off a loan early, but according to some personal finance experts, it could be smarter to invest that money instead.
The big picture: Mortgage-free doesn't mean expense-free. Don't forget about taxes and utilities, says two-flat owner Betsy Elsaesser, who paid down her mortgage by renting out the other unit.
- Yes, but: A steep monthly homeowner's fee "doesn't hurt as bad when it is not coupled with a mortgage payment," condo owner Jill Ruskusky says.
Since paying off their mortgage last October, West Ridge homeowner Helen Rarick and her husband plan to use the extra funds for home improvements, retirement savings and charitable donations.
- It took the Raricks 24 years to chisel down their mortgage debt. During that time, they refinanced to a shorter loan term and made extra payments when they could.
What we're watching: Mortgage-rate humble brags. Forecasts predict rates will dip through 2024, but those 3%-ers likely got the interest rate of a lifetime.
Go deeper: Mortgages dip below 7% after the Fed hints at rate cuts