NLIHC’s A Rare Occurrence: The Geography and Race of Mortgages Over $500,000 report was published in November 2015 but it remains relevant today. The report reveals that only 5% of the mortgages obtained between 2013 to 2015 in the U.S. were larger than $500,000 and that lowering the mortgage interest deduction (MID) cap to $500,000 would have no impact on most homeowners nationwide given the rarity of mortgages over that amount.
The report is located on the Resources page of the United for Homes (UFH) website. It provides clear evidence to support one part of the UFH proposal – lowering the cap on the amount of mortgage debt for which interest can be deducted from $1 million to the first $500,000.
The key findings from the analysis are:
- Of the nearly 20 million mortgages originated from 2012 to the end of 2015, just 5% were larger than $500,000. In 39 states, the percent of mortgages over $500,000 was less than 3%; in 19 states, it was less than 1%.
- Mortgages larger than $500,000 were geographically concentrated. The ten states with the greatest number of mortgages larger than $500,000, in order, are California, New York, Virginia, New Jersey, Texas, Massachusetts, Illinois, Maryland, Washington, and Florida. These ten states accounted for 81.0% of the national total. California alone accounted for 45.7% of the national total.
- The share of mortgages larger than $500,000 was greater than 10% in just 48 counties (1.5% of all U.S. counties). These forty-eight counties accounted for 67.4% of the national total of mortgages larger than $500,000. Fourteen of these counties were in California and accounted for nearly 43.8% of the national total.
Additionally, the report provided evidence that the MID also disproportionately benefits white households, who are more likely to be homeowners and have higher incomes than black and Hispanic households. White borrowers overwhelmingly hold the most mortgages over $500,000 while Asian borrowers have the highest percentage of mortgages over $500,000. White borrowers accounted for 64.3% of the mortgages larger than $500,000 and Asian borrowers accounted for 14%, for a total of 78.3% of all such mortgages. This issue was discussed on the June 14, UFH endorser webinar, “Housing, Racial Equity, and United for Homes.” During the webinar, experts shared data and their perspectives on the importance of the UFH proposals for racial equity.
A Rare Occurrence: The Geography and Race of Mortgages over $500,000 report is at: http://nlihc.org/research/rare-occurrence
Housing, Racial Equity, and United for Homes webinar is at: http://bit.ly/2sxOClV
Visit the United for Homes website at: http://www.unitedforhomes.org/