It has been dubbed by the U.S. Treasury Secretary as the "biggest tax cut" in history yet the tax plan announced by the Trump Administration this week is receiving both adulation and speculation.
"NAHB commends President Trump for tackling tax reform and keeping the mortgage interest deduction as one of the two individual deductions," said NAHB Chairman Granger MacDonald. "However, doubling the standard deduction could severely marginalize the mortgage interest deduction, which would reduce housing demand and lead to lower home values."
The mortgage interest deduction, which is the largest deduction for the majority of tax payers, allows homeowners to reduce their tax liability by deducting the interest they pay on their home mortgage.
As stated in the NAHB statement, raising the standard deduction could prove to be a disincentive for taxpayers if bigger tax savings are had without being a property owner.
Today, conforming no-point 30-year fixed mortgage rates are averaging 4.125 percent while 15-year rates are near 3.25 percent.
Do you have a question for Real Estate & Mortgage Analyst Mehran Aram? Submit your queries about a home purchase, refinance, or reverse mortgage via Aramco.Biz, social media (#AramcoReport), or over the phone at (866) 381-8888 and your questions may be featured in an upcoming article.