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.”

Source: Lendingtree

This LendingTree study points to 4 key findings:

  1. There is a clear regional break in non-owner occupied properties…most of them are located in the South and in the West.
  2. 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.
  3. 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.
  4. 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 

  1. Oklahoma City, OK – 15.4%
    1. Average loan size for non-owner occupied property $193,000
    2. Average loan size for owner occupied property $182,000
  2. Philadelphia, PN – 14.6%
    1. Average loan size for non-owner occupied property $245,000
    2. Average loan size for owner occupied property $225,000
  3. Memphis, TN – 14.6%
    1. Average loan size for non-owner occupied property $126,00
    2. Average loan size for owner occupied property $192,000
  4. Miami, FLA
  5. San Francisco, CA
  6. New Orleans, LS
  7. Las Vegas, NV
  8. New York City, NY
  9. Los Angeles, CA
  10. Riverside, CA

Cities with Least Non-Owner Occupied Mortgages

  1. Detroit, MI – 5.2%
  2. Cleveland, OH – 5.7%
  3. Hartford, CT – 5.9%
  4. Indianapolis, IN – 6.2%
  5. Cincinnati, OH – 6.3%
  6. Pittsburgh, PN – 6.4%
  7. Buffalo, NY – 6.4%
  8. Columbus, OH – 6.4%
  9. Louisville, KT – 6.5%
  10. 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.