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Nearly 40% of U.S. homes are mortgage-free, census shows

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Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#41

Post by onlyrealcuzzo »

vintermann wrote: post #21

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

~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).

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#43

Post by bodeadly »

I have a crazy theory: Zillow is directly responsible for the housing shortage and high home prices. Zillow inspires people to move. More moving means houses get fixed up which increases home values. Browsing through homes on Zillow might start out as something to do when your bored but that can easily lead to "what if" thinking. Before Zillow they wouldn't even be thinking about moving.

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#44

Post by hondo77 »

Pigalowda wrote: post #33
code_runner wrote: post #26

Earlier quoted context omitted.

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?

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

Why would they pay cash instead of getting big loans for multiple properties at a favorable rate?

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#45

Post by fred_is_fred »

bodeadly wrote: post #43

I have a crazy theory: Zillow is directly responsible for the housing shortage and high home prices. Zillow inspires people to move. More moving means houses get fixed up which increases home values. Browsing through homes on Zillow might start out as something to do when your bored but that can easily lead to "what if" thinking. Before Zillow they wouldn't even be thinking about moving.

Agree that Zillow and similar make it much easier and top of mind. Home flipper shows on HGTV are also part of the equation since it looks very simple and like guaranteed profit.

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#46

Post by c22 »

Pigalowda wrote: post #33
code_runner wrote: post #26

Earlier quoted context omitted.

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?

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.

Further reading:

https://www.blackrock.com/us/individual/insights/buying-hous...

https://www.blackstone.com/housing/our-track-record-in-housi...

https://www.helpadvisor.com/retirement/blackrock-vs-the-blac...

https://fintel.io/news/blackrock-now-owns-490-of-blackstone-...

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#47

Post by giantg2 »

bodeadly wrote: post #43

I have a crazy theory: Zillow is directly responsible for the housing shortage and high home prices. Zillow inspires people to move. More moving means houses get fixed up which increases home values. Browsing through homes on Zillow might start out as something to do when your bored but that can easily lead to "what if" thinking. Before Zillow they wouldn't even be thinking about moving.

I'm not sure anyone is doing that when they're bored without some level of genuine interest.

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#48

Post by notaustinpowers »

vintermann wrote: post #21

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

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.

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#49

Post by headcanon »

bodeadly wrote: post #43

I have a crazy theory: Zillow is directly responsible for the housing shortage and high home prices. Zillow inspires people to move. More moving means houses get fixed up which increases home values. Browsing through homes on Zillow might start out as something to do when your bored but that can easily lead to "what if" thinking. Before Zillow they wouldn't even be thinking about moving.

Interesting idea, I would argue the opposite on the basis that easier, more frequent transactions in a market improves price discovery and keeps the housing price closer to the "true" price based on supply and demand.

Re: Nearly 40% of U.S. homes are mortgage-free, census shows

#50

Post by victor106 »

onlyrealcuzzo wrote: post #41
vintermann wrote: post #21

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

~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).…

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

How? any resources I can find on this topic?

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