Deficit reduction plans are entertaining the elimination of many tax breaks and mortgage interest deduction is one of them. Families who have already been hard hit with today's challenging economy would really feel the pain from this blow. Granted it is an expensive tax subsidy costing the federal government billions each year, but I for one believe any plan to reduce or eliminate the mortgage interest deduction would have a devastating effect on our already hurting economy.
Many potential home buyers are thinking long and hard before deciding to use savings for a down payment on a home. Once thought to be a safe investment and a sure bet for appreciation we've all watched the unthinkable happen as home values have fallen over the past several years. The mortgage interest deduction is a huge advantage home ownership has over renting. The reduction or elimination of this benefit would sway many potential buyers to remain renters. Less demand combined with and an increasing supply of available homes serves to push housing prices down further. Sound like the same song, second verse?
Many economist would say that the negative effect would be short term. Some say tax credits don't have anything to do with demand for houses. They are saying it, but I have to question if they really believe it. Do you? Personally the tax credit has always been one reason I've wanted to be a home owner. With a strong rental market and growing rental inventories the tax deduction plays a vital role in providing an advantage to home ownership. Do we really need to give buyers a reason not to buy?
Be encouraged to know that Realtors will rally in Washington May 17th to discuss this and other real estate issues with members of Congress. They have planned the Rally to Protect the American Dream to make sure our Congress knows that Realtors are concerned about preserving the stability of the real estate market and protecting the dream of home ownership.
As a homeowner you can have a voice by contacting your local congressman or congresswoman online and submitting your opinion. I encourage you to take a minute to do just that. Use this link
https://writerep.house.gov/writerep/welcome.shtml, enter your state and 9-digit zip code to find your representative.
