California Realtors say cutting mortgage interest tax deduction will devastate nation
Santa Clara County Realtors Association President Karl Lee warned that limitations to the mortgage interest deductions a presidential commission is considering would devastate the national economy. Home prices in the affluent California county increased roughly 6% to $699,174 in October, according to the association. It's up 11% from a year ago. The National Commission on Fiscal Responsibility and Reform, proposed two options in their efforts to overhaul the tax system. One was to reduce how much homeowners could deduct by 20%, and the other was to exclude second residences, home equity loans or mortgages over $500,000. "This policy will immediately and unnecessarily reduce the net worth of many American households," Lee said. "Limiting mortgage interest deductions will also result in domestic job losses in many core American industries that are directly or indirectly impacted by housing." Santa Clara County is seeing some improvement in the market. In October, more than 1,000 home sales closed, a 4.5% decrease from September, but it was the lowest monthly decrease in five months. The inventory of homes on the market dropped nearly 7% in October. "Removing a significant homeownership incentive is a short-sided answer to our larger national debt problem, a solution that in reality will drive the country into a deeper economic crisis," Lee said. "Every American, regardless of income status or geography, should oppose limiting mortgage interest deduction." Write to Jon Prior.