5 ms·

I'd be willing to bet that if we eliminated the home mortgage interest deduction completely it would barely move the needle of what homes people choose to buy o

I'd be willing to bet that if we eliminated the home mortgage interest deduction completely it would barely move the needle of what homes people choose to buy or the number of renters vs. owners. I would love to see the numbers, though.

dcdanko 9y ago
Yep, bigger issues are the lack of low cost housing units to buy and older institutionalized discrimination. Not the MID.
Swizec 9y ago
Until I can afford a down payment [in a location I like] you can put up as many carrots as you want, I still can't cough up the dough to even think about them.
- cmdrfred 9y ago
  Look into FHA loans. You can have a pretty low down payment.
  - Swizec 9y ago
    Thanks for the suggestion, but I don't think "low" applies to anything housing related in San Francisco. And yes there are cheaper locations, but at that point I might as well move back to Slovenia and buy a gigantic luxury condo for 300k.
  - post_break 9y ago
    You still have to pay insurance on the mortgage with those though.
shados 9y ago
Its like municipal taxes. People don't get about the cost of the house itself. They only care about the monthly payment (or well, the total cost of ownership, since the deduction only directly affect you yearly). This is kind of like municipal taxes. Take the city of Cambridge in Mass, which has an absurdly low tax rate. Compare it with some of the cities near by (eg Somerville). A similar property in a similar location will bring you down roughly the same amount per month. But in Cambridge, the value of the property itself is way higher, mainly because less goes to the city and more goes to the bank (and your equity). People factor in the deduction when they check what they can afford. If you save 12k a year in taxes, you can pay 1000 bucks a month more, which translates in a significantly more expensive property. If the deduction goes away, property value will adjust accordingly (blips down at first, maybe go up a little slower for a bit until things even out considering inflation and stuff). People who currently have a property and cut it a little close might be in trouble if they are not grandfathered, and people selling in the short term might be a little sad.
- rootusrootus 9y ago
  I have no doubt that some folks get out a calculator and plan out their budget based on the deduction, but I think many do not. Anecdotally, myself and the people in my group of friends who also own houses, we budgeted for the mortgage payment irrespective of tax benefits and just smiled on tax day. I really try to avoid as much as possible relying on outside variables like tax deductions when planning my budget. I go in conservatively and then appreciate the benefits while they last.

dcdanko 9y ago

Yep, bigger issues are the lack of low cost housing units to buy and older institutionalized discrimination. Not the MID.

Swizec 9y ago

Until I can afford a down payment [in a location I like] you can put up as many carrots as you want, I still can't cough up the dough to even think about them.

cmdrfred 9y ago
Look into FHA loans. You can have a pretty low down payment.
- Swizec 9y ago
  Thanks for the suggestion, but I don't think "low" applies to anything housing related in San Francisco. And yes there are cheaper locations, but at that point I might as well move back to Slovenia and buy a gigantic luxury condo for 300k.
- post_break 9y ago
  You still have to pay insurance on the mortgage with those though.

shados 9y ago

Its like municipal taxes. People don't get about the cost of the house itself. They only care about the monthly payment (or well, the total cost of ownership, since the deduction only directly affect you yearly). This is kind of like municipal taxes. Take the city of Cambridge in Mass, which has an absurdly low tax rate. Compare it with some of the cities near by (eg Somerville). A similar property in a similar location will bring you down roughly the same amount per month. But in Cambridge, the value of the property itself is way higher, mainly because less goes to the city and more goes to the bank (and your equity). People factor in the deduction when they check what they can afford. If you save 12k a year in taxes, you can pay 1000 bucks a month more, which translates in a significantly more expensive property. If the deduction goes away, property value will adjust accordingly (blips down at first, maybe go up a little slower for a bit until things even out considering inflation and stuff). People who currently have a property and cut it a little close might be in trouble if they are not grandfathered, and people selling in the short term might be a little sad.

rootusrootus 9y ago
I have no doubt that some folks get out a calculator and plan out their budget based on the deduction, but I think many do not. Anecdotally, myself and the people in my group of friends who also own houses, we budgeted for the mortgage payment irrespective of tax benefits and just smiled on tax day. I really try to avoid as much as possible relying on outside variables like tax deductions when planning my budget. I go in conservatively and then appreciate the benefits while they last.