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Setting the Record Straight
As the debate over tax reform and the regulatory structure of the housing finance system intensifies, misconceptions about housing and finance are proliferating. Following is the truth about some of the most widespread inaccuracies.
Misconception: Only the wealthy benefit from the mortgage interest deduction.
This pervasive fiction is a commonly cited reason for justifying elimination of the mortgage interest deduction.
Income tax deductions for mortgage interest and real estate taxes primarily benefit middle-class taxpayers with incomes between $50,000 and $200,000. While some groups will argue the contrary, consider this: taxpayers earning less than $200,000 pay about 43 percent of all income taxes. However, they receive 68 percent of the total benefit of the mortgage interest deduction and 77 percent of the total benefit of the real estate tax deduction. Moreover, larger benefits go to larger households and families, such as those with children.
Misconception: In the wake of the recession and housing market downturn, Americans have become disenchanted with homeownership and it is no longer a part of the American Dream.
Not so, according to recent polls by NAHB, the Pew Research Center and the New York Times/CBS News. In a Pew Research Center survey conducted in March 2011, 81 percent agreed that owning a home is the best long-term investment a person can make. And in a national poll of voters conducted for NAHB in May 2011, 80 percent of home owners said they would advise a family member or a close friend just starting out to buy a home in order to build long-term assets. In a New York Times/CBS News poll in June 2011, 89 percent said that homeownership is an important part of the American dream.
Misconception: Housing is not as important to the American economy as many other industries.
Actually, the downturn in the housing market is one of the largest contributors to the nation’s high unemployment rate. Total employment in residential construction (building and trade contractors for single-family, multifamily, land development and remodeling) is down more than 1.4 million jobs from the peak employment rate of 3.45 million in April 2006. The housing downturn has also contributed to the loss of more than one million other jobs--jobs in manufacturing, transportation, retail sales, engineering and other industries that provide goods and services to the housing industry. Building 100 new single-family homes generates more than 300 jobs.
Misconception: Homeownership advocates say everyone should own a home.
Homeownership isn’t for everyone, but everyone should be able to choose the home they want, whether they rent or buy. And government policies, such as the proposed Qualified Residential Mortgage standard, should not limit homeownership opportunities unnecessarily.
The actions policymakers take today will determine in large part where our children live tomorrow. As the debate over housing policy unfolds, it is crucial to ensure that homeownership remains attainable, that people can choose the type of housing they prefer, and that safe, decent and affordable housing remains an enduring national priority. Any other legacy is unthinkable.
Author: CRBRA Admin | On: October 04, 2011 | In: Government Affairs · Politics · Consumers | No Comments
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