Do you have a mortgage on your home? What about two? If you own a home here in Houston, odds are you answered yes to that first question and no to the second: Around the city, 57 percent of homeowners live in a home they're currently paying off through a mortgage. But only 3.5 percent of these folks have taken out a second mortgage on their home -- a little lower than the national average of 4.5 percent.
But there are a couple ZIP codes within the city where homeowners are far more likely to have to tack on a second mortgage to pay off their debts. In both 77021 and 77030, two contiguous areas near the Med Center, 9.7 percent of mortgage holders have taken out a second mortgage.
It seems the reasons are different for each.
The homes in 77021 aren't particularly expensive. In fact, with an average home value of $81,500, houses -- and condos -- here are significantly more affordable than the city average of $131,700 for owner-occupied homes. But with many residents in 77021 working in jobs that pay less than the average Houstonian earns, paying off a modest home requires maximum effort. Here, 38.9 percent of residents blow at least 30 percent of their household income on housing costs, compared with 32.5 percent nationally.
That can leave anyone strapped.
Meanwhile, the high rates of second mortgages in neighboring 77030 appear to be borne out of different necessities. In 77030, only 22.7 percent of homeowners shell out more than 30 percent of their income on their homes, despite significantly higher home values, at an average of $460,900 for owner-occupied homes. So what gives?
In 77030, 85 percent of homeowners have at least a four-year college degree (compared with 34 percent in 77021), which could mean homeowners here are using home value to help pay off student debt. But not just for the homeowner: Though there are plenty of young adults who live in 77030, a huge portion of homeowners are old enough to have college-aged kids. And they may be taking out these second mortgages to help pay for their children's education. In 77030, 86.7 percent of 18- to 24-year-olds who claim an address here have attended college, compared with 54.8 percent in 77021.
So while both ZIPs claim 9.7 percent of mortgage holders opting for a second line of credit on their home, this tale of two ZIP Codes reveals very different reasons for why this might be.
