34% of Californias homeowners are mortgage-free

Published: Friday, October 3, 2025 at 3:19 pm

California Sees Surge in Mortgage-Free Homeownership, But Challenges Remain

A recent analysis of Census Bureau data reveals a significant shift in the California housing market. Over a five-year period, the number of homeowners in the state without a mortgage grew substantially, outpacing the growth of those with home loans. This trend coincides with a period of historically low mortgage rates and rising home prices.

The study found that 34% of California homeowners are now mortgage-free. This represents a 16% increase in mortgage-free homes over the five-year period, a growth rate eight times faster than the increase in homes with mortgages. While this growth is notable, it's not unique to California. Nationwide, the number of mortgage-free homeowners also increased by 16%.

Several factors contribute to this trend. An aging population paying off existing mortgages, a growing movement towards debt-free living, and relocations from high-cost areas to more affordable ones have all played a role. Additionally, the reduced tax benefits associated with mortgage interest deductions may have made mortgages less attractive for some.

Despite the rise in mortgage-free ownership, California's median home value remains the highest in the nation. While home values in California rose by 34% over the five-year period, this was still less than the national average.

However, mortgage-free living doesn't equate to a lack of financial burden. California's mortgage-free owners face the eighth-highest median monthly housing costs in the nation, driven by property taxes, insurance, and upkeep. These costs have also increased significantly in recent years. Furthermore, a significant percentage of mortgage-free owners still experience a high housing cost burden, with housing expenses exceeding 50% of their income.

For those with mortgages, the financial strain is even more pronounced. California homeowners with mortgages face the second-highest monthly housing costs in the country, and a larger percentage of these homeowners are burdened by housing costs exceeding half their income.

BNN's Perspective: The data highlights a complex picture of the housing market. While the rise in mortgage-free ownership is encouraging, the high cost of homeownership, regardless of mortgage status, remains a significant challenge, particularly in California. Policymakers should consider strategies to address rising housing costs and ensure affordability for all homeowners.

Keywords: mortgage-free, homeownership, California, housing market, mortgage rates, home prices, housing costs, property taxes, financial burden, debt-free living, census data

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