The paid-off castle is mostly a myth, and the Federal Reserve has the receipts. Only about a third of homeowners own home free and clear of home-secured debt, according to a 24/7 Wall St. report on the Federal Reserve’s latest family finance survey.
How many homeowners own home free and clear?
The Fed’s report, titled “Changes in U.S. Family Finances from 2022 to 2025,” found that 65.6% of families owned their primary residence in 2025. About 42% of all families still carried debt secured by that home. According to the report as quoted by 24/7 Wall St., “almost two-thirds of homeowners have home-secured debt, while just over one-third of homeowners own their home free of debt.”
The math backs that up. Divide 42% by 65.6% and you get roughly 64% of homeowners with debt. That leaves about 36% debt-free. That last figure is our own arithmetic, not a number the Fed published.
Note what counts as debt here. The Fed’s measure includes first mortgages, junior liens and home equity lines of credit on the primary residence. So a homeowner with no mortgage but an open HELOC still lands in the debt column (the Fed does not grade on a curve).
What everyone else owes when the house isn’t paid off
Among families with home-secured debt, the median balance rose 8% to $183,600. That’s up from $170,200 in 2022. Meanwhile, the mean balance climbed 3% to $239,700, up from $232,500.
So the typical borrower owes more than they did three years ago. Meanwhile, the ownership rate slipped slightly, from 66.1% in 2022. The share with home-secured debt barely moved, from 42.2% then to about 42% now.
Rising borrowing costs only add pressure, as our look at surging bond yields and mortgage rates shows.
Why Census data paints a rosier picture
You may have seen a much bigger number elsewhere. Census Bureau data shows a record 40.3% of owner-occupied homes were mortgage-free in 2024, according to Axios. However, that’s not a contradiction, because the two datasets measure different things.
The Fed’s survey counts families and any home-secured debt, including HELOCs. The Census counts housing units and looks only at mortgages.
As a result, a home with a HELOC but no mortgage is mortgage-free to the Census. It is not debt-free to the Fed, so the share of homeowners who own their home outright looks smaller in the Fed’s data.
Why it matters to your wallet
Here’s the thing: whether you’re a buyer, an owner or a future seller, the number you hear depends on who is counting. Age drives much of the gap. A ResiClub analysis of Census data, reported by NowBAM, says 64% of homeowners 65 and older own outright.
For younger buyers, the picture is far less cozy, which fits a broader trend of Americans delaying life milestones.
Monthly costs tell the same story. The Census Bureau says median monthly owner costs for homeowners with a mortgage hit $2,035 in 2024, up from $1,960 a year earlier, adjusted for inflation.
Owning is expensive. Owning with a loan is more expensive still.
One caution on sourcing: we could not pull the Fed report itself, so these survey figures come through 24/7 Wall St. Check the numbers against federalreserve.gov if you plan to rely on them.
The paid-off house is still the finish line most owners are running toward. For roughly two out of three of them, the race isn’t over yet.
