The mortgage industry and stock market reacted positively to U.S. Congress delaying sweeping tax hikes on Americans in a final fiscal cliff vote this week.
The real estate and home lending industries also averted a few negative scenarios: a loss of the Mortgage Forgiveness Debt Relief Act and positive tax implications for certain families that have private mortgage insurance. The mortgage interest deduction remains in tact for now, but could be picked up at a later date.
But from a macroeconomic standpoint, some analysts say the nation is still far from out of the woods.
Capital Economics released a report saying the deal “didn’t include a provision to raise the debt ceiling, and the scheduled spending cuts have only been delayed for two months.”
The research firm also worries the “cantankerous nature of the negotiations over the past ten days” is making it almost likely another standoff will occur over the debt ceiling and spending cuts.