The Home Mortgage Deduction

The Home Mortgage Deduction:


On the news there has been much noise lately about eliminating the Home Mortgage Deduction. But it is just that, noise; it will not happen. Let me explain. All of this talk has originated from the House of Representatives. Unlike Senators, members of the House represent specific local communities, which may be comprised of 70% renters and 30% homeowners. Another district may be comprised of 30% renters and 70% homeowners.


The representative of the district comprised of 70% renters will certainly favor doing away with the home mortgage deduction. This disparity is to be expected from a body of legislators whose concerns and interests are primarily dependent on the demographic make-up of the district they represent. Hence the righteous indignation we hear from certain members of the House concerning the social injustice that is the Home Mortgage Deduction. Not surprisingly, the Districts of such representatives maintain a higher percentage of renters.


The national average of American's able to buy or rent has roughly 60% owners and 40% renters. The larger the geographic area considered, the greater likelihood this area will approach this national average. The vast majority of states are large and diverse enough to mirror this national average. Senators representing these states will under no circumstances vote to eliminate a tax advantage that benefits a substantial majority of their constituents.


For Senators, the home mortgage deduction is a third rail akin to Social Security. As long as the ratio of owners to renters holds at near current levels, and I see no sign that it will change, Senators will not cast a vote certain to end their political careers, and is so against the interests of their constituents. Hence, in the unlikely event that a move to eliminate the Home Mortgage Deduction emerges from the House of Representatives, it will most certainly die quietly and quickly in the Senate.



Mark Ceretto

Mark Ceretto

Licensed Real Estate Salesperson
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