In February, we handicapped a 75% chance that Congress would reduce the mortgage interest deduction, when consensus among our clients was only a 32% likelihood. Since Congress is getting closer to acting, we are publishing a free copy of our February 2011 report and circulating it around D.C. so we can help officials make an informed decision.
The most likely scenario, a reduction in the principal balance of deductible mortgage debt to $500,000, raises only $5 billion per year for the IRS, with most of the pain being felt in a few high-priced markets.
The less likely scenario, but the one recommended by the deficit commission, will replace the deduction with a 12% tax credit that would also have a $500K principal cap. This would raise $48 billion per year for the IRS, and significantly increase taxes on those with higher mortgage balances, and actually reduce income taxes for those who currently own a home but don’t pay enough mortgage interest to itemize.
We are not policy makers, so we are not taking a stand. We are, however, all about delivering great, fact-based research to help executives make great decisions. Let’s hope policy makers might the right decisions for our country, both in the short-term and the long-term.
Building Market Intelligence™
Every week, we deliver analysis to over 40,000 subscribers with our Building Market Intelligence™ newsletter. Subscribe to our weekly BMI newsletters to stay current on pressing topics in the housing industry.
Our research services enable our clients to gauge housing market conditions and better align their business and strategic investments in the housing industry. We provide a thoughtful and unique holistic approach of both quantitative and qualitative analysis to help clients make informed housing investment decisions.
The New Home Trends Institute pairs design inspiration with exclusive insights into the “why” behind consumers’ housing choices. Gain exclusive insight into housing preferences and pain points through our monthly survey insights reports, webinars, and proprietary surveys of builders, architects, designers, and other industry professionals.