There is a well-documented shortage of housing for America’s lowest income households. Part of the exhaustive study on the economics of housing has also produced an avalanche of information about the exact opposite end of the housing spectrum: Those who have mortgages in excess of half a million dollars.
The National Low Income Housing Coalition just released a study of the housing needs and disparities in this country. The number-crunchers looked at the 20 million mortgages that originated between 2012 and the end of 2014, and found that 5 percent of mortgages were beyond jumbo.
In exact figures, that’s 989,456 mortgages for $500,000 and above.
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The report also points out that mortgage originations had slowed down after the most recent housing crisis, noting that mortgage originations declined by about 1 million from 2011 through 2013. However, mortgages larger than $500,000 increased by more than 23,000 from the earlier analysis.
DC ranks 14th on the list of big mortgages by numbers, with 13,261 granted during the study period.
The 10 states with the greatest number of mortgages larger than $500,000 are California, New York, Virginia, New Jersey, Texas, Massachusetts, Illinois, Maryland, Washington and Florida. These 10 states accounted for 81 percent of the national total.
Expressed as percentages, more than 27 percent of mortgages in the District of Columbia were worth more than $500,000, the highest in the country. Washington, D.C. was followed by Hawaii at 24 percent and California at 16.8 percent of mortgages being jumbo or better.
That just goes to show another point that the report makes: Mortgages larger than $500,000 are concentrated in high cost areas on either coast.
So for the rest of us in the 39 states, the percent of mortgages valued at more than $500,000 was less than 3 percent of the national total. To pare down one step further, half a million plus notes were less than 1 percent of the total in 19 states.
That kind of mortgage can earn a big tax break for those who take that expensive plunge. Taxpayers can annually deduct the interest paid in that tax year on home mortgages of up to $1,000,000, and is not limited to just the primary residence.
Once you can surpass the hurdle of getting into a home, home equity loan interest can be written off as well, and added on top of the home mortgage interest deduction. That benefits anyone with a mortgage, and can go up to an additional $100,000.
