The number of people in New Jersey who own their home outright has increased dramatically over the last decade or so. According to U.S. Census figures from 2022 the numbers show that 36.7% of homes in New Jersey are owned outright, no mortgage or home equity loan. That number has increased from 28.9% reported by the U.S. Census in 2010. Not just an 8% increase but is 20% more than the number of homes that were owned outright in 2010.
On a national scene, the number of homes owned outright increased to 39.3% in 2022, up from 33.8% in 2010. The fact that homeownership without any mortgage is increasing is the byproduct of the baby boomer generation aging out of their 30-year fixed-rate mortgages and others refinancing their homes at a lower fixed rate. Either way, more people own their homes outright than in past memory.
What does this mean?
Well, first it clearly provides a more stable economic climate for not only the real estate industry, but the economic health of the entire nation. Some homeowners have chosen not to pay off their mortgages early because their financial advisors have told them that their cash or available cash can be put to better use in the stock market. Still, homeownership does have its costs: the price of fuel has gone up significantly, energy costs have increased, building supplies have increased, sometimes increasing over 300%, and of course, now real estate taxes, especially in the state of New Jersey, have become an onerous burden for homeowners to bear.
In some cases, the high real estate taxes are driving out individuals from the Garden State to states that are less tax burdensome. The problem is that as long as inventory remains low and the cost of housing remains extraordinarily high, people between the ages of 18 and 35 are still living primarily with their parents or renting. Saving for a home is clearly problematic.
So, at this point we will see a great transfer of wealth and real estate pass from the baby boomer generation to their children over the next decade and a half – and in many cases such properties will be debt-free homes for their heirs.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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