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There’s great news for America’s homeowners: A growing percentage now own their homes outright. No mortgage, no liens.
As of 2024, about 38.8% of owner-occupied homes in the United States are owned outright, meaning they no longer have mortgages to pay, according to U.S. Census Bureau data. That is a 40% increase between 2012 and 2022.
Over half of homeowners from this reporting period are also above the retirement age of 65. So if you’re fortunate enough to be mortgage-free and headed towards retirement, chances are you have a lot going for you financially.
For starters, the worth of your home, should you choose to sell it, represents 100% equity — meaning your bank owns none of it. If property values in your area have jumped since buying, your home is now much more than a roof over your head. It’s also a storehouse of wealth.
Here’s a closer look at what a fully owned residence could translate to in dollars and cents.
It’s important to note that homes don’t provide returns like traditional investments. After years of mortgage payments, much of your money goes to the lender.
For example, on a $500,000 home with a $100,000 down payment and a 15-year mortgage at 2.5%, you’d pay around $80,000 in interest, excluding property taxes, repairs and insurance.
Even if you don’t own your own home, there are other ways to get the housing market working for you without a hefty downpayment or managing property. New investing platforms are making it easier than ever to tap into the real estate market.
For accredited investors, Homeshares gives access to the $36 trillion U.S. home equity market, which has historically been the exclusive playground of institutional investors.
With a minimum investment of $25,000, investors can gain direct exposure to hundreds of owner-occupied homes in top U.S. cities through their U.S. Home Equity Fund — without the headaches of buying, owning or managing property.
Backed by world-class investors like Jeff Bezos, Arrived makes it easy to fit these properties into your investment portfolio regardless of your income level. Their flexible investment amounts and simplified process allows accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.
Between 2008 and 2013, home prices more than doubled, according to the Federal Housing Finance Agency. This means that a $500,000 home bought in 2008 could be worth $1.08 million today.
Another way to determine what your paid-off home is worth is by considering how it impacts your retirement budget.
By eliminating a $2,500 mortgage payment, you cut your annual expenses during retirement by $30,000.This can help bring your retirement income needs closer to the lower end of the 55%-80% range suggested by Fidelity. Paying off your home before retirement can make for more years of mortgage free investing.
For example, paying off your home by 60 years of age frees up $150,000 to invest over five years. At a 7% return, that can grow to $210,000 — providing a solid retirement cushion and the means to build extra wealth.
Real estate investing can be a proven path to building lasting wealth. For the 12th year in a row, Americans have ranked real estate as the best long-term investment in 2024, according to a Gallup survey.
Through strategic investments in commercial properties and residential real estate, investors can create a robust portfolio that provides both immediate returns and long-term growth.
Today, innovative investment platforms are making real estate more accessible than ever. First National Realty Partners (FNRP) allows accredited investors access to grocery-anchored commercial real estate investments with a minimum investment of $50,000.
With FNRP, investors own a share of properties leased by national brands like Whole Foods, Kroger and Walmart, providing potential cash flow without the headache of tenant costs and management.
One creative way to fund your retirement lifestyle is through a reverse mortgage, which lets you tap into your home equity to supplement your income, pay off substantial debt or fund renovations.
The average homeowner has a home equity of $313,000 as of March 2025, according to the ICE Mortgage Monitor report. This could beis quite substantial depending on your financial situation.
You can choose to borrow the funds as a lump sum or fixed monthly payment and can spend it however you want, allowing you to turn all that home equity into tax-free cash, helping to support your retirement lifestyle.
With a reverse mortgage, you can continue living in your home while accessing its value — and you won’t have to make monthly mortgage payments. The loan only becomes due when you move, sell the home or pass away.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
