Mortgage Interest Deduction Vital to American Dream, Say Realtors®

CLIVE, IA (12/04/2012)(readMedia)-- In an effort to find sources of revenue to avoid the looming "fiscal cliff," Congress and the White House are deep in debate over limits on a broad array of deductions for taxpayers. One of these is the mortgage interest deduction (MID), a tax break that Realtors® say is vital to the stability of the American housing market and economy.

Specific legislation capping or eliminating the MID has not been proposed, however some have speculated that it could be on the table as public policy makers in Washington look for ways to address the U.S. budget deficit.

The National Association of Realtors® (NAR) and the Iowa Association of Realtors® (IAR) will not speculate on any hypothetical scenarios, but have always been long-standing supporters of the MID. "Until Congress introduces specific legislation, there's nothing to say about any proposed changes to the mortgage interest deduction," said 2013 NAR President Gary Thomas. "We will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest."

If a deal is not reached, many believe a "fiscal cliff" could have severe damages on the economy and may result in another recession. Realtors® believe this could in turn have a significant effect on the recovering housing market.

"The housing market is still healing," said Don Marple, 2013 IAR President. "We've made some very good progress, but the market is continuing to recover. Another recession could severely impact the growth we've experienced to date. The debate over limiting deductions is an important one, but the MID should not be part of it. Too many Americans rely on this crucial tax break."

Marple points out the MID facilitates homeownership by reducing the carrying costs of owning a home. It also benefits primarily middle- and lower income families. Sixty-five percent of families who claim the MID earn less than $100,000 per year. In addition, American homeowners already pay 80 to 90 percent of U.S. federal income tax, and this share would rise if the MID were eliminated or reduced.

"Changes to this important homeownership benefit would destroy the wealth accumulation of millions of hardworking middle-class families and the dreams they've worked hard to achieve such as college, retirement or starting a small business," said Marple. "The ability to deduct the interest paid on a mortgage can mean significant savings for many families in this country. Tampering with the MID could tip the economy into another recession resulting in further job losses for the country, and could effectively close the door on the American dream.

NAR has just asked for a call for action on the MID, says Marple. "Iowa Realtors® are currently responding in full force to this call, to remind Congress that the MID is important for homeowners and for America. Realtors® in Iowa and across the nation will continue to fight for homeownership, to keep that door of opportunity open for current and future generations of Americans."

The term Realtor® is a registered trademark, which identifies real estate professionals who follow a strict code of ethics as members of the National Association of Realtors®. The Iowa Association of Realtors® is the state's largest real estate professional organization representing nearly 6,200 members and affiliates.