WorldPropertyChannel reports National Association of Home Builders (NAHB) assistant vice-president and economist Robert Dietz says eliminating or reducing the mortgage interest deduction (MID) would hurt the chances for younger families to buy homes, as well as damage the already shattered housing industry and the economy in general. Testifying before the Senate Finance Committee, Dietz says, “We believe that any policy change that makes it harder to buy a home, or delays the purchase of the home until an older age, will have a significant long-term impact on household wealth accumulation and the make-up of the middle class as a whole.” Noting that middle-class homeowners with annual incomes under $200,000 make up 70 percent of the tax benefits, he says, “Out of 75 million home owners, 35 million claimed the mortgage interest deduction in 2009. This fails to 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 own their homes free and clear and used the deduction in the past. The bottom line is that 70 percent of home owners with a mortgage have claimed the deduction.” In testimony on home ownership incentives, Dietz stresses the importance of the Low Income Housing Tax Credit which produces 90,000 full time job, as well as the deduction for those who buy second homes. “Building 100 single-family homes creates more than 300 full-time jobs,” he says. “Housing can act as a catalyst for job growth and an economic recovery because home building employs such a wide range of workers.”
