NAR and other experts fear that by raising the standard deduction, less people will itemize, and the mortgage interest deduction will have less value. This could, in turn, discourage homeownership, according to these experts.
“I think people buy homes because it represents security and a way to build wealth and a sense of stability,” said Laurie Goodman, Urban Institute co-director of the housing finance policy center. “I don’t think the mortgage interest deduction plays a large role in that decision.”
Dan Gilbert, Quicken Loans founder and chairman also agreed with Cohn, saying people buy homes because they are excited about the economy, not because of the mortgage interest deduction.
In fact, one expert says that while she would prefer to revise it, if she had to choose between keeping the deduction or getting rid of it, she would rid of the mortgage interest rate deduction.
“The mortgage interest rate deduction is not increasing the pipeline of working and middle-class homeowners,” Redfin Chief Economist Nela Richardson said in an interview with HousingWire. “It is a subsidy incentive that is given to people who itemize, and itemizes tend to be for high-income earners.”
A study the company expects to release latest this week shows households making over $100,000 receive 77% of the benefit from the mortgage interest deduction, while those making over $200,000 receive one third of the benefit.
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