Middle Class Would Suffer With Mortgage Interest Deduction Changes
By Andre Spinelli President, (Anchorage Home Builders Association)
Owning a home for most Americans is not only a place to raise a family and build a sense of stability and pride, it is also their single best long-term investment and a primary source of wealth and financial security. As the foundation of the American dream, homeownership has long been a milestone that middle-class families strive to achieve and maintain.
For more than a century, Americans have counted on their homes for their children's education, for their retirement, and for their financial security. According to the 2007 Federal Reserve Survey of Consumer Finances, the median net worth of a home owner is $234,600, compared to $5,100 for renters.
But as policymakers seeking to reduce the federal deficit consider eliminating or decreasing the mortgage interest deduction, it is younger, middle-class families who would see their longer term financial prospects significantly and negatively affected.
Tampering with the mortgage interest deduction would place more downward pressure on home prices, which would cause more home owners to have mortgage balances that are higher than their homes are worth, spur more foreclosures, and act as a further drag on the housing and economic recovery. Millions of existing home owners who are struggling to make ends meet, but still manage to stay current with their mortgage payments, would face a big tax increase they cannot afford.
And claims that the deduction benefits only wealthy taxpayers and that only a small number of home owners utilize the deduction are misleading. In reality, 70 percent of homeownership tax benefits go to middle-class home owners who earn less than $200,000. And out of 75 million home owners, 35 million claimed the mortgage interest deduction in 2009. This doesn't even take into account the millions of taxpayers who are renters and one day aspire to own a home of their own, and the roughly 25 million who now own their homes free and clear, but used the deduction in the past.
Policymakers looking to create jobs and boost economic growth need look no further than housing. According to data recently shared by economic experts at the National Association of Home Builders in testimony to Congress, building 100 single-family homes creates more than 300 full-time jobs.
Learn more about the threat to the mortgage interest tax deduction and find out how you can take action to protect it at www.SaveMyMortgageInterestDeduction.com, or contact Andre Spinelli at 907-344-5678.