LendingTree just released its latest study ranking cities by non-owner occupied homes. It gleaned its information from mortgage origination data however, often, non-owner occupied properties are bought for cash and this mortgage-focused study may understate market effects.
Tendayi Kapfidze, the chief economist for LendingTree, believes that the share of non-owner occupied mortgages is important in this industry environment of long-standing inventory shortages. “Each one of theses non-owner occupied mortgages…takes away viable options for would-be buyers.”
This LendingTree study points to 4 key findings:
- There is a clear regional break in non-owner occupied properties…most of them are located in the South and in the West.
- Southern cities may be attracting investors based upon low home prices and growing populations. Southern cities may be creating a strong rental pool as many residents may not be able to afford a down payment on a home due to lower median savings and lower median wages.
- Western cities may be attracting investors due to rapid price appreciation opportunities. These same higher home prices may also be creating a strong rental pool as high home prices often suppress homeownership.
- Both the Midwest and Northeast have, overall, more affordable home prices. Affordability stimulates homeownership opportunities and drives down the need for rental units.
Cities with Most Non-Owner Occupied Mortgages
- Oklahoma City, OK – 15.4%
- Average loan size for non-owner occupied property $193,000
- Average loan size for owner occupied property $182,000
- Philadelphia, PN – 14.6%
- Average loan size for non-owner occupied property $245,000
- Average loan size for owner occupied property $225,000
- Memphis, TN – 14.6%
- Average loan size for non-owner occupied property $126,00
- Average loan size for owner occupied property $192,000
- Miami, FLA
- San Francisco, CA
- New Orleans, LS
- Las Vegas, NV
- New York City, NY
- Los Angeles, CA
- Riverside, CA
Cities with Least Non-Owner Occupied Mortgages
- Detroit, MI – 5.2%
- Cleveland, OH – 5.7%
- Hartford, CT – 5.9%
- Indianapolis, IN – 6.2%
- Cincinnati, OH – 6.3%
- Pittsburgh, PN – 6.4%
- Buffalo, NY – 6.4%
- Columbus, OH – 6.4%
- Louisville, KT – 6.5%
- Salt Lake City, UT – 6.8%
One interesting statistic…the average income of a non-owner occupied property buyer is $163,000; the average income of an owner-occupied property buyer is $117,000, according to LendingTree.