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Non-Owner-Occupied Homes: Where Are They Most Common?


non-owner-occupiedWhether they’re hoping to get ahold of an older abode or a freshly built one, today’s dearth of for-sale stock [1] isn’t doing would-be buyers any favors. Every ounce of available inventory makes a difference, including non-owner-occupied properties (i.e., vacation, investment [2], and second homes).

To assess their impact on inventory, LendingTree [3] recently identified the U.S. cities with the highest share of mortgages originated for non-owner-occupied homes. “Many such properties are often bought for cash, however, which means our mortgage-focused study likely understates the effect on the market,” the company noted.

When dissecting the data, LendingTree detected a definite regional trend, with cities claiming the most non-owner-occupied properties located mostly in the South and West.

“Southern cities may be attracting investors due to low prices and growing populations,” LendingTree explained. “Many residents in Southern cities may not be able to access homeownership due to lower median salaries, creating a ready pool of renters.”

Rapid price appreciation is likely luring investors in the West, the study notes. That region’s infamously high prices hinder homeownership, thus creating a ready pool of renters.  

Cities with the fewest non-owner-occupied properties trend in the Northeast and Midwest, where “affordable homes mean the opportunity to be a homeowner is high and less appreciation attracts less investors,” LendingTree explained.

Of the 50 cities studied, Oklahoma City snagged the top slot, with a 15.4 percent share of non-owner-occupied mortgages and a $193,000 non-owner-occupied average loan amount. Philadelphia clocked in at No. 2, with a 14.6 percent share and a $245,000 loan amount.  Memphis rocked the No. 3 spot, with a 14.6 percent share and a $126,000 loan amount. Miami, San Francisco, New Orleans, Las Vegas, New York, Los Angeles, and Riverside, California, round out the top 10, respectively.

The city with the least non-owner-occupied mortgages: Detroit, with a 5.2 percent share and a $115,000 non-owner-occupied average loan size. Next comes Cleveland at No. 49, with a 5.7 percent share and a $124,000 loan size. Hartford, Connecticut, chalked up a No. 48 ranking, with a 5.9 percent share and a $237,000 loan size. Finishing out the bottom 50 are Indianapolis (47); Cincinnati (46); Pittsburgh (45); Buffalo, New York (44), Columbus, Ohio (43); Louisville, Kentucky (42); and Salt Lake City (41).