So what happens is that people are paying on their mortgages and then they have a windfall from the inheritance and can get out of debt if they want to, or not

So what happens is that people are paying on their mortgages and then they have a windfall from the inheritance and can get out of debt if they want to, or not if they think their current mortgage is a good deal. In the past decades, what I've seen is that a debt-free house is normal inheritance when it comes to real estate. But maybe not for the future. Yes, as you say the heirs are usually not young themselves, but maybe with 10-15 years left of working before retirement. And as retirement ages get pushed up for today's young to 70 years and further, this means these people are staying at the workplace and will be staying there. > Likewise, almost no one has unrealized annual capital gains on their primary residence which are anywhere near their regular income. Then we live in different worlds. With people and places I know it is normal to have a higher return in real estate appreciation than from labour. Mainly because taxes take away most of your salary, while real estate appreciation is tax free. People have been talking about "real estate careers" for a long time now. Meaning that they're borrowing the maximum amount possible and getting more and more expensive homes as their main career, while their day job is just a way to make minimum mortgage payments and qualify for more expensive mortgages.