I honestly can think of nothing worse that could be done to worsen the housing crisis.
Tip of the day: don't vote for Obama.
In case you haven’t noticed, the housing market has already been destroyed. The home mortgage tax “incentive” has never been anything less than a government ploy to make “investors” feel better about paying exorbitant interest rates. It’s a negative return anyway you slice it.
It would be better to let the market establish its base. Government interference only makes matters worse. Removing another false government incentive will do nothing more than hasten the return of the housing market to its real value.
The elimination of the home mortgage deduction would destroy what's left of the housing market in America for a generation.
Plus adding an additional 9% to the cost of a home doesn't sound all that appealing either. The cost to move to pursue a job in another area will now discourage home buying because not only the agent's hickey of 6% but now another 9% (or more). That is an awful amount of vig to give up and we'll probably see far more corporate owned homes and a lot more leasing.
Good, the housing market needs to return to equilibrium, rather than being falsely inflated by incentives.
Good. We then start to put the capital that was being malinvested to better, more productive uses.