Industry News

Altering mortgage interest deduction could drop home prices by 15%

NAR president calls tax reform proposals 'startling'

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Home prices, particularly in high-cost areas, could decline 15 percent if President Bush's tax reform panel's expected recommendation to convert the mortgage interest deduction (MID) to a tax credit gets implemented, said Al Mansell, president of the National Association of Realtors. Speaking at the opening session of the 2005 Realtors Conference & Expo in San Francisco, Mansell said that if the MID were changed, the typical homeowner could lose $20,000 to $30,000 in housing equity. "Housing is the engine that drives this economy and to even mention reducing the tax benefits of home ownership could endanger property values. The tax deductibility of interest paid on mortgages is both a powerful incentive for home ownership and one of the simplest provisions in the tax code. It should not be targeted for change," Mansell said. "NAR will continue to tell Congress that Realtors strongly oppose any attempts to alter the current tax treatment of mortgage interest." Eliminating the ...