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Which Cities Have the Most Non-Owner-Occupied Houses?

non-owner-occupiedWhether they’re hoping to get ahold of an older abode or a freshly built one, today’s dearth of for-sale stock isn’t doing would-be buyers any favors. Every ounce of available inventory makes a difference, including non-owner-occupied properties (i.e., vacation, investment, and second homes).

To assess their impact on inventory, LendingTree recently identified the U.S. cities with the highest share of mortgages originated for non-owner-occupied homes. “Many such properties are often bought for cash, however, which means our mortgage-focused study likely understates the effect on the market,” the company noted.

When dissecting the data, LendingTree detected a definite regional trend, with cities claiming the most non-owner-occupied properties located mostly in the South and West.

“Southern cities may be attracting investors due to low prices and growing populations,” LendingTree explained. “Many residents in Southern cities may not be able to access homeownership due to lower median salaries, creating a ready pool of renters.”

Rapid price appreciation is likely luring investors in the West, the study notes. That region’s infamously high prices hinder homeownership, thus creating a ready pool of renters.  

Cities with the fewest non-owner-occupied properties trend in the Northeast and Midwest, where “affordable homes mean the opportunity to be a homeowner is high and less appreciation attracts less investors,” LendingTree explained.

Of the 50 cities studied, Oklahoma City snagged the top slot, with a 15.4 percent share of non-owner-occupied mortgages and a $193,000 non-owner-occupied average loan amount. Philadelphia clocked in at No. 2, with a 14.6 percent share and a $245,000 loan amount.  Memphis rocked the No. 3 spot, with a 14.6 percent share and a $126,000 loan amount. Miami, San Francisco, New Orleans, Las Vegas, New York, Los Angeles, and Riverside, California, round out the top 10, respectively.

The city with the least non-owner-occupied mortgages: Detroit, with a 5.2 percent share and a $115,000 non-owner-occupied average loan size. Next comes Cleveland at No. 49, with a 5.7 percent share and a $124,000 loan size. Hartford, Connecticut, chalked up a No. 48 ranking, with a 5.9 percent share and a $237,000 loan size. Finishing out the bottom 50 are Indianapolis (47); Cincinnati (46); Pittsburgh (45); Buffalo, New York (44), Columbus, Ohio (43); Louisville, Kentucky (42); and Salt Lake City (41).

About Author: David Wharton

David Wharton, Managing Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 15 years of experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@theMReport.com.

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