Smaller loans, like those common in rural areas, are easier to pay back more quickly, the company explained, and those who have been in their home longer are more likely to have paid theirs off as well.
Still, a high percentage of those people between the ages of 20 and 24, 34.5%, also own their property free and clear.
The study also found that 44% of those in the VantageScore band between 800 and 900 do not have a mortgage. However, only 15.5% of the homeowners in the 900-990 range, the highest in the VantageScore methodology, do not have a mortgage.
According to Zillow chief economist Stan Humphries, such data are important because those whose properties are unencumbered by debt are more flexible than those who have a mortgage (or worse underwater on their mortgage) and are more able and/or willing to list their home for sale or enter the market to buy a new home.
Among the 30 largest metropolitan areas, Pittsburgh has the highest percentage of free and clear homes, 38.6%, followed by New York, 29.7%, Cleveland, 29.4%, and Miami, 28.9%.
At the other end of the spectrum is Washington at just 15.5%, followed by Atlanta, 17.7%, Las Vegas, 18.3%, Denver, 18.5%, and Charlotte, N.C., 20%.
Separately, a FICO-Professional Risk Managers’ International Association survey of bankers found they expect consumers to be applying for more new credit and bump up the limits on their existing credit accounts over the next six months.
A majority of the respondents said the supply of financing for new and refinanced mortgages, along with other forms of consumer credit, will meet or exceed consumer demand over the next six months. The percentage of respondents that said this for new mortgages was 53% and for refis was 61%.
Andrew Jennings, chief analytics officer for FICO, said 2013 might be the year “Americans begin to embrace credit again, after the considerable deleveraging we’ve seen since 2008. With both the job market and real estate sector showing signs of life, American consumers may again be willing to fund their lifestyles by taking on more debt.
“And it appears banks are willing to oblige.”