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Mortgage-free properties provide a boost to the local economy

Vaseline 2 months ago


While real estate’s contribution to the Tri-Cities area’s overall economy has declined since the early post-pandemic years, it still represents about 16% of the local economy. During the first quarter, that dropped to just over $131 million.

But that’s not the only economic cushion the local economy provides. Here’s a national-level example from ResiClub Pro: “Not only is 96% of mortgage debt fixed-rate in the US, but 38.5% of homeowners have no mortgage at all.”

One reason some economists believe the U.S. economy has been more resilient than others is the larger cushion homeowners have against spiking interest rates. Unlike owners in Britain and Canada, most American homeowners will not see payments adjusted to the new market rates. “Additionally, the fact that many American homeowners have no debt at all means that if they need to sell and buy another home, they may be able to roll over the equity, but in cash, and avoid high interest rates. At the same time, they can avoid cuts to discretionary spending and keep the economy as a whole warmer.”

That’s broadly true here in the Tri-Cities, where 51.9% of all owner-occupied homes are mortgage-free. In fact, the number is higher if you add the number of mortgage-free properties in Greene and Johnson counties to the Census Bureau’s Tri-Cities Combined Statistical Area (CSA) count.

Below is an overview of the most current share of mortgage-free households:

  • Carter – 57.4%
  • Green – 50.4%
  • Hawkins – 51%
  • Johnson – 61.2%
  • Sullivan – 49.1%
  • Unicoi – 51.7%
  • Washington Co.TN – 44.1%
  • Scott Co., VA – 67.2%
  • Washington Co. VA p- 50.1%

Whichever way you look at it, real estate means much more to the local economy than the other components that receive more attention.