The Wall Street Journal published this article about the mortgage-interest deduction having little – or no – impact on the decisions made by homebuyers:
Of course, the N.A.R., who is beholden to our lobbyists, refuses to consider any changes. The N.A.R. spent $64,821,111 last year on lobbying – we should quit paying them and spend that money on a rocking real estate portal that benefits all realtors!
Instead, our beleaguered president shuffled up to the podium one more time to vomit the usual beliefs, whether true or not:
The mortgage interest deduction, backed by the influential nationwide lobbying of real-estate agents and home builders warning against precipitous price drops, has survived decades of attacks and is extremely unlikely to vanish this year.
William Brown, president of the National Association of Realtors, said that removing incentives for homeownership, including the mortgage interest deduction, would be a mistake.
“Studies comparing our housing market to that of a foreign country offer an apples-to-oranges scenario that often isn’t constructive,” Mr. Brown said in a statement. “What we know for sure is that home values would suffer if the mortgage interest deduction disappeared, potentially putting homeowners under water.”
Curbing the deduction would give cash buyers an advantage, said Robert Dietz, chief economist at the National Association of Home Builders.
President Donald Trump has promised to protect the mortgage interest deduction. But even under the plans from Mr. Trump and congressional Republicans, the deduction could lose some of its punch.
With mortgage rates so low, the actual benefit isn’t what it used to be. In addition, wouldn’t rising rents and getting rich quick be bigger motivators than the MID? Have you noticed that you never hear banks arguing for the MID?
I would be happy to see the MID go away. It isn’t much of a benefit for most people anyway. Maybe the lower home ownership rate among Millenials is what makes it politically feasible. Time will tell…
Cap it and Fannie/Freddie at $200k and we’re good.
With the proposed increase in the standard deduction to 15/30k the MID becomes relevant only to folks on the coasts where house prices are high. After all if your mortgage is 200 k (high for the midwest outside the Chicago area) today your interest is only (at 5%) 10k. In particular with the proposal to do away with all deductions except that for Charity and the MID, the MID becomes irrelevant for most folks in the US.
what about loss of deductibility of state and local taxes, how does that play in?
what about loss of deductibility of state and local taxes, how does that play in?
Those who have larger mortgages probably pay more state and local tax, so the loss should substantially offset the MID.
Lyle, can you do the math on that one for us?
But let’s back it up to the beginning – the MID discriminates against renters, and that’s wrong.
Get rid of all deductions and make personal and corp taxes a flat 15% for all regardless of income with no wiggle room…okay exempt the first 50K of income or corp net profit or whatever there so we can put tax attorneys and cpa armies to pasture and I can have my next return be 2 pages instead of 94!!!
As far as MID…yeah it would be a bit of a hit and home prices would probably go down a bit to compensate but probably quickly stabilize and recover. And in my case the benefit was wiped out anyway due to the %^$&!!!!&^% Alternative Minimum Tax which would also get eliminated in my ‘if I was king of the planet’ above scenario so that’s fine with me too.
Thank you.