RUTHERFORD COUNTY, TN -Amid rising mortgage rates and increased financial pressure on American households, one subset of homeowners stands out: those who have fully paid off their homes. Nationwide, 27.7% of working-age homeowners (who are under the age of 65) are mortgage-free—but not all areas have equal rates of free-and-clear homeownership. Construction Coverage’s newest study examines mortgage payoff rates for working-age homeowners in the U.S., identifying the metros and states where residents are most likely to own a mortgage free home before the age of 65.
In the Murfreesboro area, the numbers are not very impressive. Locally, the percentage of homeowners aged 64 or younger without a mortgage is 22.3%. The median home value for mortgage-free homeowners is $350,000, while the median home value for those with a mortgage in the Murfreesboro area rings in at $425,000. Median household incomes for those who don’t have a monthly loan payment is $100,000, while mortgage holders under age 65 have a median income level of $120,000 in Rutherford County.
The savings really add up when comparing monthly expenses of mortgage-free homeowners versus mortgage holders in Murfreesboro and Rutherford County. The median monthly housing cost for those who own a home mortgage-free in the area is $510, while mortgage holders face a median expense of $1,908 per month. When looking at housing costs as a percentage of income, those with a mortgage spend 19% of their income on housing costs, while free-and-clear homeowners only utilize 6% of their annual income on housing costs.
7 Largest Cities in TN and Ranking of Free and Clear Homeowners:
- Johnson City, TN: 37.6% of those 64 or younger are Mortgage Free
- Cleveland, TN: 32.8% of those 64 or younger are Mortgage Free
- Chattanooga, TN: 31.6% of those 64 or younger are Mortgage Free
- Knoxville, TN: 29.3% of those 64 or younger are Mortgage Free
- Memphis, TN: 25.2% of those 64 or younger are Mortgage Free
- Nashville/Murfreesboro, TN: 22.3% of those 64 or younger are Mortgage Free
- Clarksville, TN: 21.9% of those 64 or younger are Mortgage Free
TENNESSEE as a WHOLE: In the Volunteer State, the monthly housing expense for homeowners with mortgages sits at a median amount of $1,580. Meanwhile, those without a mortgage are spending much less each month, with a median amount that adds up to $444.
Throughout the entire state of Tennessee homeowners with mortgages typically have higher home values. Homes owned free and clear have a median home value of $245,000, while mortgaged households are valued at a median of $330,000. Nationally, homeowners with a mortgage report a median home value of $360,000, compared to $250,000 for homes without a mortgage. Among working-age homeowners in Tennessee, 29.4% own their homes outright, which is above the national average of 27.7%.
Households with a mortgage have a median annual income of $121,000 nationwide, compared to just over $85,000 for those who have fully paid off their homes. Similarly, households with a mortgage in Tennessee earn a median of $104,000, while those without a mortgage earn $75,000. This could partially be attributed to the fact that without the expense of a monthly loan payment, residents can focus on jobs they enjoy, rather than chasing the highest-paying positions to cover mortgage payments.
RISE IN MORTGAGE RATES: The rise in mortgage rates began in 2022 and accelerated in 2024, placing significant financial pressure on American households and reshaping the housing landscape. While some homeowners locked in historically low rates during the pandemic era, today’s elevated borrowing costs have made it much more challenging for new buyers to enter the market or for existing homeowners to refinance. Those with adjustable-rate mortgages or nearing the end of fixed-rate periods face intensified financial strain as monthly payments rise sharply.
Homeowners who have fully paid off their homes are in a stronger financial position to weather periods of economic uncertainty and elevated rates. According to Census Bureau data, while approximately 63% of homeowners aged 65 and over have fully paid off their homes, less than 28% of working-age homeowners (under 65) have done so. This leaves a substantial portion of the working population vulnerable to financial stress, especially during times of high-interest rates and inflationary pressures.
Mortgage payoff rates vary significantly across the country. While at the national level, the share of homeowners under age 65 who have paid off their homes is 27.7%, not all areas have equal rates of free-and-clear homeownership. Being mortgage-free is strongly negatively correlated with both household income and home value; thus, certain Southern states, like West Virginia (41.1% of homes are paid for in the 64 or younger age group), Mississippi (40.8%), and Louisiana (36.2%), have shares of owner-occupied homes that are paid off above 35%.
