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Mortgage-Free Living

mortgage-payment-dueLast week, California Governor Jerry Brown signed legislation to solve affordable housing issues, one of the biggest issues the state is now facing, but a recent report by the Orange County Register says despite those problems, 2 million Californians are living mortgage free.

According to the report, 29 percent of all owner-occupied residences in the state were mortgage-free, up from 23 percent a decade ago, which is interesting considering the current state of housing affordability and slipping ownership numbers.

“California’s debt-free flock has grown by 339,000 homes—20 percent—in a decade,” the report said. “Meanwhile, California homeowners with mortgages have dropped by 498,000 — 20 percent — to 4.93 million since 2006, the peak of an easy-lending era.”

Compared to the nation, which has only grown by 14 percent in the last decade, the article attributes California’s increased mortgage-free living to years of historically low-interest rates causing owners to use savings to pay off a mortgage or buy in all-cash deals.

“Mortgage-free living is equally common throughout Southern California counties, with the share of occupied homes having no mortgage relatively the same in all four counties at slightly more than 1-in-4 last year,” the report said.

Census data show that mortgage-free homeowners in California are paying about $546 a month, which is compared to an average $2,188 for an owner with a mortgage and $1,375 for a renter. These reasons make the 15-bill package signed by Gov. Brown important to many homeowners and renters in the state.

“These new laws will help cut red tape and encourage more affordable housing, including shelter for the growing number of homeless in California,” Brown said in a statement last week.

The bills seek to amend zoning, low-income housing opportunities, lower costs of construction, the speed of development, and limiting regulation that prevents new developments from being undertaken.

About Author: Brianna Gilpin

Brianna Gilpin, Online Editor for MReport and DS News, is a graduate of Texas A&M University where she received her B.A. in Telecommunication Media Studies. Gilpin previously worked at Hearst Media, one of the nation's leading diversified media and information services companies. To contact Gilpin, email [email protected].

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