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Comment by vintermann | Hacker News Reader

And how many percent of US homeowners are mortgage-free?

Should be around 40%. The headline graph in the article has its data source as "Among owner-occupied housing units; Annually, 2012-2022". There shouldn't be much difference between percent of owner-occupied homes that are mortgage free and percent of homeowners who are mortgage-free.

Wealthy people tend to have second homes, which are also considered "owner-occupied".

I suspect this comment will be severely underrated, but it conveys such a deep insight into the right way to think about this. This is the variable we really care about!

~67% of homes are owner occupied.

It's unlikely ~100% of the investor owned homes are free and clear and only ~3% of owner occupied homes are owned free and clear.

For one, the tax code HEAVILY incentivizes investors to own property on leverage. For two, the only reason property is/was a good investment was because of artificially low interest rates for most of the last ~25 years (an entire generation of investors). When you combine that with a leveraged bet that cannot be margin called, you will make a FORTUNE (and many did).

Leverage was the way.

I'm willing to bet the majority of free and clear owned homes are owner occupied (simply because 2/3rds of homes are owner occupied).

> the tax code HEAVILY incentivizes investors to own property on leverage

Can you expand on this claim?

Mortgage interest deduction is often talked about but realize that unless you itemize deductions you can't do it, and itemizing has been made very difficult so most people won't qualify[1].

There are many good reasons own your home, but tax code benefits is not one of them.

[1] https://taxfoundation.org/blog/standard-deduction-itemized-d...

> he tax code HEAVILY incentivizes investors to own property on leverage

How? any resources I can find on this topic?

I think this is referring to --

1. The mortgage interest deduction (reduced under Trump, of all presidents).

2. 1031 Exchange elections, which let you avoid capital gains.

> The mortgage interest deduction (reduced under Trump, of all presidents).

The way I understand it, reducing the mortgage interest deduction disproportionately affected homeowners with higher mortgages in high cost of living areas, just like reducing the SALT deduction affected people in higher income tax/cost of living areas. Both of these were likely supported by President Trump to punish "blue staters" in these areas.

It's an older story (from May) but it looks like only about 23% of US homeowners are mortgage-free. Although they were also including renters in this analysis. (https://www.forbes.com/sites/johnwake/2023/03/31/us-has-3rd-...)

I couldn't find anything that specifically looked only at homeowners, rather than at homes themselves.

this is an interesting distinction but I don't know enough to totally wrap my head around it. Can you expand a bit on how a home would have no mortgage but that same homeowner would?

One person owning multiple homes..

Or a company owning hundreds of homes.

I have a few friends who had major liquidity events happen to them and they each own 3-5 homes as investment homes. I believe these properties were paid full in full and in cash, so no mortgage.

This small proportion of my friends is mortgage free, but they own multiple houses so a fairly large proportion of my friends houses are mortgage free.

Blackrock and other funds buy thousands of homes and rent them out. Those are mortgage free homes.

You're probably thinking of Blackstone which spunoff from Blackrock in the 1980s.