The mortgage interest deduction is capitalized into home prices by 1 to 13 percent.
Evidence
The real estate lobby is powerful, however, and here’s how they will likely argue against neutrality: Any repeal of the mortgage interest deduction will have consequences for current home values. The price of the mortgage interest deduction is believed to be factored into the price of homes by anywhere from 1 percent to 13 percent; such a repeal, the lobby would argue, will reduce the value of homes by a comparable amount. (The National Association of Realtors estimates a 10 percent decline, while the Council of Economic Advisers says the impact is likely to be merely “modest.”) History has shown us that stoking fear in white homeowners is a powerful tool, and one that the real estate industry has used freely. — Dorothy A. Brown, The Whiteness of Wealth, 232
Categorization
Category: Factual Claims
- SHARE: The NAR (10%) vs CEA (modest) split on repeal’s price impact is a sharp data point for someone in tax policy or housing.
Related
- Repealing the mortgage interest deduction would lower US home values (similarity 0.93)
- The real estate lobby fights reforms by stoking white homeowners’ fears of falling values. (similarity 0.86)
- Repealing the deduction would harm black homeowners since home equity dominates black wealth. (similarity 0.82)
- Economists agree the mortgage deduction fails to boost homeownership. (similarity 0.81)
- The mortgage interest deduction raises home prices and fails to encourage homeownership (similarity 0.81)
- The mortgage interest deduction rarely influences the decision to buy a home. (similarity 0.80)
- The mortgage interest deduction benefits mostly high-income households and is shrinking in scope. (similarity 0.80)
- Lawmakers publicly framed the mortgage deduction as the key to homeownership (similarity 0.79)
- The 2017 tax act quietly curtailed the mortgage interest deduction. (similarity 0.79)
- Only 29 percent of US tax filers claim the mortgage interest deduction (similarity 0.79)
- Subprime targeting simultaneously shrinks black home equity and their mortgage interest deductions (similarity 0.79)
- Capping the mortgage interest deduction provoked no public backlash (similarity 0.78)