As if the real estate market weren’t bad enough, this will caues it to crash completely.
Mortgage payments not being fully deductable effectively INCREASES the payments, when people already can’t afford them. Also — once they start to monkey with it, there is no guarantee that they won’t eliminate mortgage interest deduction completely, which will mean that a HUGE number of people will NOT be able to afford their mortgage payments, and with that hanging over people’s heads, nobody who doesn’t already own a house will want to own on, and people will put houses on the market, just to get out of having to pay the mortgage payments.
This is what you do, if you completely want to destroy real estate FOREVER — which is exactly what Obama and the Dems are doing, and they are NOT that stupid, so the only other alternative is that they are doing it deliberately, they WANT to destroy private ownership. Then they will take over all private real estate, it will be owned by the government and people can rent from them. THIS is what was going on in communist countries, there was no private ownership.
Not really. What it will increase is the amount of federal tax people have to pay. Will they look at their increased taxes and then decide they can't afford their house? Perhaps.
Given the very low interest rates over the last 10 years, I think many people will find that not having that deduction would make only a small difference. I figured my taxes with and w/o that mortgage deduction and it increased my taxes under $1000.