Why Homeownership Access Is Shrinking in the New York Metro

Rising mortgage-free ownership is locking up supply and reshaping affordability

Over the past decade, the share of homeowners who own their homes free and clear has risen sharply across the New York metropolitan area. This dynamic is most extreme in Manhattan (New York County), where roughly 50% of homeowners now own their homes without a mortgage. However, even as the mortgage-free share remains lower across the outer boroughs, the pace of change over the past decade has been striking. Between 2013 and 2023, the share of homeowners owning free and clear rose by at least five percentage points in every outer borough.

As mortgage-free ownership has become more the norm and less the exception across the New York area, the incentives and sensitivities that drive the housing market have shifted beneath the surface. With minimal carrying costs and little exposure to interest-rate changes, these households face almost no financial pressure to sell. Housing has increasingly shifted from a market good to a long-term asset — and, in many cases, an intergenerational one.

This shift has direct consequences for homeownership access. When a growing share of owners no longer responds to price or rate signals, the velocity of housing supply slows. Listings thin out, turnover falls, and first-time buyers are effectively shut out. In Manhattan, this dynamic is already well established.

What’s notable — and more concerning from an access perspective — is that the same trend is advancing rapidly across the broader metro area, and across the US more generally, even if it has not yet reached Manhattan’s extremes. As the outer boroughs follow a similar trajectory, the traditional housing ladder weakens. Owners age in place longer, fewer move-up transactions occur, and the pool of homes available to new buyers shrinks — even as population growth and household formation pressures persist.

At the same time, intergenerational transfer is becoming a more central channel of access to homeownership. A growing share of housing in the New York metro is being passed down either free and clear or with substantial equity attached.

Evidence of this shift is apparent when zooming in on younger homeowners. Across the New York metro area, the number of homeowners under the age of 40 owning their home with a mortgage fell by 26.2% between 2000 and 2023. Over the same period, the number of under-40 homeowners owning their home free and clear surged by 64.4%.

As the front door to first-generation homeownership narrows, the effects spill into the rental market. When households cannot buy, they rent for longer. That keeps rental demand elevated and pushes affordability pressure downstream.