The Fiscal Cliff and the D.C. Metro Housing Market

I have watched people say, for the past several years, that the trend is for smaller, more functional homes. I believe this is true; I just don't believe this is true in every market. With the infamous 'Fiscal Cliff,' talks on-going, there is a possibility that this trend will take hold whether it is by preference or not.

Frankly, much of my work with buyers has to do with folks who are 'moving up.' That can be defined in a number of ways. Sometimes 'moving up,' means getting more space to accommodate a growing household. It can sometimes mean purchasing a new home to show the world (or themselves) that they have 'made it.' And often, it means buying a more expensive home so that they can take a larger tax deduction and improve their personal financial situation.
I am not commenting here on the politics of this tax deduction. I long ago decided that there is nothing to be gained by creating an on-line political discussion.
What I will comment on, however, is my belief that if this tax deduction goes away, much of my business--and all the peripheral businesses that benefit from my work--will, too. I realize that sounds melodramatic, but I don't think that it is.  
I work in one of the wealthiest counties in the country. Many of my clients are entrepreneurs or executives. Their net worth is tied to their after-tax income.  Tax deductions matter to them. 
I realize that we as a country have bigger problems than whether one of my clients moves up to a bigger house because they need a tax deduction. In fact, my personal beliefs about how to handle this fiscal cliff require that I struggle with this issue. But in terms of sheer numbers of clients and the value of property that I sell, I am very, very confident that eliminating this deduction will result in a significant negative change in my business. It will also create a surplus of large, high priced homes that will be very difficult to sell.
Modifying the deduction is a different scenario.  Changing the amount of the deduction would have an impact, but as long as it remains in place, I believe that my business will still be viable. Some deduction is better than no deduction.
This 'fiscal cliff,' is a huge turning point for our country. I would be remiss, if I did not point out that 'going off' the cliff, would also have a huge impact on my business. Fairfax and Loudoun Counties are home to many, many people who work in the defense business and for the Federal Government. In fact, almost everyone's livelyhood is tied, directly or indirectly, to the government (so please, Congress and Mr. President, negotiate in good faith and  keep this from happening).
It has been argued that this deduction is an entitlement for the rich.  I understand the argument. I also know that my business will suffer greatly, and in fact the local housing industry in general, if this deduction goes away.


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Comment balloon 66 commentsHolly Weatherwax • December 03 2012 04:54AM


So much wisdom from someone so young. 

I've just moved on after realizing that, we're doomed.  How's that for an uplifting moment?

I see absolutely nothing positive on the horizon for our businesses or our industry. 

My name isn't Pollyanna.

I deal with FACTS, not FICTION.  That said, if a home buyer wants good representation in my market area, I'm here to help.  What I will NOT do is paint a rosy scenario of the real estate market. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) about 6 years ago

I have family in Canada. Canada did not experience the boom and bust real estate market that we had here. Real Estate in the Toronto area is very very expensive but rises in value slowly...more in line with incomes. Guess what Canada has not mortgage deduction...few countries do, If we cut rates for everyone in reality they will be paying the same amount in taxes as if they had the normal mortgag deduction.  Some folks just buy a home to save on taxes when  in reality even those in the highest income bracket save pay $1 to save 35 cents....hardly a smart move. The fiscal cliff also affects Northern VA since so many in that area have well paying jobs with the Federal Government...and more are added every year...seems the Government never has a recession.

Posted by Edward Gilmartin (CRE) about 6 years ago


The Mortgage Interest Deduction is a huge incentive for people when purchasing homes. Tinkering with it now, just as real estate is making a comeback is a mistake...IMO.


Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) about 6 years ago

Holly, very well written. Fiscal cliff will have a huge impact on just on housing market but over all DC metro economy. Many of home buyers especially first time home buyers do the math if they rent versus their payment after interest deduction does influence their purchasing decision.

Posted by Ritu Desai, Virginia Realtor-Fairfax/Loudoun/PW-703-625-4949 (Samson Properties) about 6 years ago


I just don't get it...People in power are paid well, have access to data and research and are supposed to be the guardians and protectors of the peoples interests. Why are the headlines not reading correctly: ELECTED AND WELL PAID OFFICIALS FAIL TO DO THEIR JOBS...PUBLIC AT LARGE SUFFERS ONCE AGAIN

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 6 years ago

I believe changing the current format of the MID will have an impact on the market.  Would it be the death nell for the real estate recovery?  I don' think it will long term but it will have a short term impact while the details are sorted through.  If the only reason a person is buying a home is for a tax break then are we promoting homeownership the right way? 

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) about 6 years ago

The market changes, we adapt, and go on.  This past year has been just as, maybe more busy, for me, than any past year.  However, each transaction is worth less than in previous years.  Even though I am just as busy the effort to reach closing does not diiminish as the dollar value decreases.  The demographics of the buyer pool has changed significantly as does the requirements to get past underwriting.  Ten years ago my clients did not need my services near as much as they do now.  I could have fun again if we ever reach full employment again with less Federal control.

Posted by Dwight Puntigan, Dwight Puntigan (DRP Realty, LLC) about 6 years ago

Good conversation. We have to realize that the proverbial fiscal cliff was lept from long ago. The question now is when or if the ripcord will be depolyed.

I have been a big proponent of a 12%-15% flat tax on individuals and a 25% tax on corporations with NO deductions for anyone. Social Security tax should be on 100% of income and perks, bonuses etc. 

Now, coming back to reality, we are still in dangerous waters economically. Just go about our business each day and prepare for whatever comes.

Posted by Doug Dawes, Your Personal Realtor® (Keller Williams Realty - Topsfield, MA) about 6 years ago

I woke up this morning thinking about this issue in addition to the extension of the Mortgage Debt Relief Forgiveness Act.  I'm sick of Congress playing chicken with the economy. 

Posted by Tamara Inzunza, Close-In Alexandria and Arlington Living (RE/MAX Executives) about 6 years ago

That's the problem with income taxes. It distorts the market. People do things that they wouldn't otherwise do if it weren't for the tax policies.  But that's the whole point of taxes.  It gives politicians something to sell which gives them power.  There really isn't any need for taxes in a fiat money system that we have.  If we don't collect enough in taxes, we just print it up.  We can just print up the entire amount if we wanted to. If they can print up enough to cover a trillion dollar defict, they can print up the rest. 

Most won't believe this. I didn't believe it.

Read the speech that Beardsley Ruml, Chairman of the Federal Reserve Bank of New York, made in 1945.

Final freedom from the domestic money market exists for every sovereign national state where there exists an institution which functions in the manner of a modern central bank, and whose currency is not convertible into gold or into some other commodity.

The United States is a national state which has a central banking system, the Federal Reserve System, and whose currency, for domestic purposes, is not convertible into any commodity. It follows that our Federal Government has final freedom from the money market in meeting its financial requirements. Accordingly, the inevitable social and economic consequences of any and all taxes have now become the prime consideration in the imposition of taxes. In general, it may be said that since all taxes have consequences of a social and economic character, the government should look to these consequences in formulating its tax policy. All federal taxes must meet the test of public policy and practical effect. The public purpose which is served should never be obscured in a tax program under the mask of raising revenue.

What Taxes Are Really For
Federal taxes can be made to serve four principal purposes of a social and economic character. These purposes are:
1. As an instrument of fiscal policy to help stabilize the purchasing power of the dollar;

2. To express public policy in the distribution of wealth and of income, as in the case of the progressive income and estate taxes;

3. To express public policy in subsidizing or in penalizing various industries and economic groups;

4. To isolate and assess directly the costs of certain national benefits, such as highways and social security.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) about 6 years ago

Great post, and valid point. What is the true ownership benefit when one is responsible for payments, taxes, insurance, maintenance with no further monetary benefit? I would like to add that with the reduced rates of mortgages currently, the benefit has already been reduced!

Posted by Rebecca Lee McAnallen, Big city experience, small town service (RGS Title, LLC ) about 6 years ago

The mortgage tax deduction is not just for the wealthy. It's one of the few middle class deductions left!

Posted by Olga Simoncelli, CONSULTANT, Real Estate Services & Risk Management (Veritas Prime, LLC dba Veritas Prime Real Estate) about 6 years ago

The very mention of the so-called fiscal cliff is having a negative impact on my buyers & seller's confidence.

It seems a broader understanding of the issues is not preventing a quiet panic!

Posted by Vanessa Saunders, From Manhattan to the Catskills of New York (Global Property Systems Real Estate) about 6 years ago

The fiscal cliff is something that a lot of persons are really concerned about nowadays.  Hopefully, things will hold together.

Posted by Jon Karlen, Louisville & Shelbyville Kentucky real estate (Finish Line Realty - Shelbyville & Louisville Ky Real Estate) about 6 years ago

Holly, Great post and valid points. These tax deductions are important for all of us tied to the housing market. I mainly work with 1st time home buyer so this issue is not necessarily a burning issue for them, however for the overall health of the real estate market I think this deduction is necessary and important. Especially during a time when the housing market is starting to make a come-back. We shall see what happens.... 

Posted by Sean Williams, Your Louisville Realtor (AcklesWilliams of Semonin Realtors) about 6 years ago

A valid point you make indeed. Thanks for sharing this post in an intelligent manner, I will bookmark this and come back again.

Posted by Adam Brett, The Adam and Eric Group, Fullerton's Finest (The Adam and Eric Group) about 6 years ago

Holly Good Job on post same in Arizona

Posted by Keith Ritter, 602-908-5020 AZ Realtor, Glenndale AZ Real Estate (Keller Williams Profesional Partners Glendale AZ Real Estate Peoria/Realtor) about 6 years ago

The MDFA must be extended to progress our housing recovery. The MID is purely circumstantial to each home owner. To all Realtors out there: keep marketing by picking up that 500 pound telephone because you competition is not doing this. Its very simple, as lender my marketing costs are not radical because I want to talk to people on the phone and then you incubate that lead accordingly.

Posted by Ron Aguilar, Mortgage & Real Estate Advisor since 1995 (Continental Mortgage) about 6 years ago

Hi Holly, in our market the move "down" seems to be more due to the past recession.

Posted by Bob Miller, The Ocala Dream Team (Keller Williams Cornerstone Realty) about 6 years ago

Great post. Comments like #2 leave me scratching my head. "Americans spend $1 to save 35 cents". This is a simple math equation that the commenter missed. 1.00-.35= .65. 

Posted by Andrew Herren (Craig Massee Real Estate) about 6 years ago

Great perspective Holly. People in your area should know better than anyone what kind of impact this will have on housing one way or the other.


Thanks for sharing.

Posted by Fred Sed, Your Orange County Realtor, Why? Because Fred Sed (Fred Sed Group ~ Your Premier Southern California Realtors) about 6 years ago

Thanks for the post & 100% correct.  It will impact housing nationwide. 

Posted by Gretchen Bradley (Realty Source Inc.) about 6 years ago

Congress acts without thinking about all the consequences of their actions. If they had honest financial advisers - if they would think through the unintended consequences of each new tax and each new law - maybe they'd use better sense.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 6 years ago

Unfortunately the Powers are trying anything so they don't have to cut entitlements. Raising taxes is not going to fix the over $16 Trillion deficit. Have to cut spending...Whatever gets the least amount of flak the power tries to get endorsed. Mortgage deduction is just another possibility to hurt the economy.

Posted by Bill Reddington, Destin Florida Real Estate (Re/max Southern Realty) about 6 years ago

You are lucky you live in the D.C. market! I saw on Nightly News that the counties around D.C. area are the wealthiest in the country, since that is where most of the lobbyists live.  I don't know what they will do if they make bribery, excessive campaign contributions, illegal in Washington?

Posted by Steve Hula, All Star Real Estate - Team Hula (All Star Real Estate) about 6 years ago

And what really burns my........toes, is that neither candidate much more than mentioned the housing crisis during the whole campaign.  And what better industry could put more people back to work than the housind industry?

Posted by Woody Edwards, A Realtor® Who Answers His Phone! (First Choice Realty, Inc) about 6 years ago

Great post!

It will have a negative impact on our business- if they eliminate the Tax deduction.... Nuff Said!

Posted by Ben Yost - 303-587-4297, FHA, VA, Conventional - Mortgage Loans in De (First Time Home Buyer, Mortgage Rates, Pre-Approval) about 6 years ago

I live in a rural area where the local Multi-Billion dollar corporations pay their employees just enough to qualify for "Government subsidized" housing, food stamps and other "tax payer" sponsored programs.  The root of the problem is much deeper than our "Government". It extends into the Corporate Business Model where, in a round about way, Tax Payer Monies are used to subsidize their employees low wages. We all see the numbers, the CEOs are being paid millions, millions that should be going to increase employee wages.

Posted by Steve Hula, All Star Real Estate - Team Hula (All Star Real Estate) about 6 years ago

I did not vote for him in 2008 or last Nov.

Posted by John Rakoci, North Myrtle Beach Coastal Carolinas (Eagle Realty) about 6 years ago

If morgage interest deductions go away, it will be a disaster for the real estate market.  I really don't think our politicians are that stupid, and I have a lot of confidence in the real estate lobby so I don't think it'll go away.  I personally bought my first home because of the deductions.

Posted by Sina Mollaan, ABR, GRI (W.C. & A.N. Miller, A Long & Foster Company) about 6 years ago

The Mortgage Tax Deduction is off the table now.  (You recall the Republicans wanted to do away with it so the tax cuts for the wealthiest Americans could continue).

Posted by Steve Hula, All Star Real Estate - Team Hula (All Star Real Estate) about 6 years ago

Sorry about that last "Political" comment.  Some of my best friends are Republicans ...

Posted by Steve Hula, All Star Real Estate - Team Hula (All Star Real Estate) about 6 years ago


The mortgage interest deduction is an important element when our clients buy property.  It will definitely affect those clients.  I remain optimistic that the Congress and the President will realize the importance of the deduction and not do away with it completely.

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) about 6 years ago

Our Congress is to blame for the Cliff.  It has been going on for a long time and both parties keep it as a volley ball item to show their party they can do what the party wants and damn the people.  Well it is time to put it to rest and solve the problem once and for all.  I doubt this will happen as we have such a divided Congress that can't even vote on the day it is.  The people need to remember this when they vote and I personally think we need a whole change in Congress to get things done.  Get rid of the good ole boys/girls and get fresh blood in there that isn't afraid to get things done.

I fully believe they will come up with a last minute solution to delay the actual decision till next year as they don't want to work during the Holidays.  Next year we can only hope they do changes to spending and taxes to make this economy start to grow.  The housing market has been hanging on by it's finger tips and if the tax deduction goes away, I feel we will see a return of a DEEP recession.  It is one of the few areas that is slowly growing and can generate a lot of jobs.  Hopefully practical minds will prevail.

I have been in this business for over 40 years and see it changing almost every day.  If the tax deduction goes away there will be a lot of pain for a lot of people and it might be time to really cut back on spending as the market will probably shrink to next to nothing.  I hope not as it supports a lot of people across the nation.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) about 6 years ago

As a realtor in Northern Virginia (the DC metro area), I have just written email to the Speaker John Boehner and my own Congressman telling them almost the exact same thing as Holly stated.  I also told them it is their job to get this fixed.  I am not interested in the "why they can't" or the "let's blame the other guy" story.  They need to just do it.

Posted by Micki Lyons (Century 21 New Millennium) about 6 years ago

Good information.  I'm behind study on the pros and cons of the Fiscal Cliff, but after reading your post, I'm going to spend some time today reading them.  Thanks for the post! 


Brad Lynch

Posted by Brad Lynch (Premier Nationwide Lending) about 6 years ago

I agree with you and your commentor #35 Micki. I don't want to talk politics, I just want to see some results. And the elimination of the mortgage interest deduction will have a huge impact on the home buyers who are paying their bills, whether they are struggling or not. I agree that this will have a huge impact on my business as well.

Posted by Dana Hollish Hill, Lead Associate Broker (Hollish Hill Group, Keller William Capital Properties) about 6 years ago

The Mortgage Deduction will have a serious impact on our business.  It is one huge benefit of owning a home.  I have owned several homes and am currently renting.  The Mortgage Interest Deduction is really the biggest deciding factor in my purchasing in the next several months.  If it goes away, there is not a huge benefit to me owning.

It will also impact the first time home buyer.  On a $280,000 mortgage at 3.25% of home buyers in the 15% tax bracket will save $150 a month that translates into approx $25,000 in buying power.  Imagaine if interest rates climb!!

Posted by Kevin Vitali, Helping Massachusetts Home Buyers and Home Sellers (EXIT Realty- Massachusetts Short Sales & Residential Sales) about 6 years ago

Holly, I am going to humbly disagree. I worked with several move-up buyers this year. When I asked each of them what prompted the move, none responded because they wanted an additional tax write-off. I don't own a home just because I get the MID. I own a home for the same the same reason I don't lease a car--I want to OWN IT!! Not lease it, not rent it but own it.

Whether you get the MID or not (if you get a fixed-rate loan), the house payment will remain the same for the entire length you are in that home. Lease/rent payments don't do that. They increase sometimes every year. Plus, at the end of the loan, you have an asset. An asset that will probably have increased in value. You can sell that asset and walk away with a lump sum of money to either buy another home or do whatever you like. When you rent a house, apartment, townhome, you walk away with nothing at the end of the lease. Homeownership is still the American dream and I don't think that is going to go away just because the MID might.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) about 6 years ago

Let's hope we can get all of this worked out. The ripple effect of losing tax deductions will be felt, to what extent is the question.

Posted by Josh and Jenn McKnight Team (Keller Williams Real Estate) about 6 years ago

My first find in researching a positive for this whole thing took me to a neat elaborate blog post.  If you want to read it, I'd love to hear what you all think about what they are saying.


I believe the folks writing this post at Lipstick and Polictics see a benefit in sacrificing now for the long term.  I'm not imposing my opinion, but it sounds reasonable to me.  :) 

Keep your head up!  (;

Posted by Brad Lynch (Premier Nationwide Lending) about 6 years ago


Hi Holly,

That's a pretty good assessment -- one to which I concur.

Whatever the course taken now, I know it will impact our market tremendously on the other side of Washington, D.C. in Montgomery and Prince George's Counties.

Regrettably, we have allowed our government to borrow and spend in such a reckless fashion over the years that we now find ourselves in this position.





Posted by Thomas F. Kennedy, Esq. - Montgomery & Howard County Real Estate (Oz Realtors) about 6 years ago


Interesting blog post.  One of the challenges to all of this is that we are no longer looking to ENCOURAGE folks to save, work hard and make it on their own.  The tax incentive for a mortgage deduction was traditionally a great way for folks to have a retirement nest egg.  This along with saving and investing, making money on the amount you save was a good thing. 

We've worked for big blue chip companies and known families that made essentially the same money.  Of the two in the case I am thinking of, one was very financially careful, saved and scrimped.  The second spent more than every dime they made.  Both were probably RICH, but you wouldn't know it by their assets. 

Encouraging folks to grow assets is just smart.  Taking that away from them makes a lot more folks who are going to count on entitlements and then we will really have a riot.  I find it really frustrating that we have folks that don't pay their own taxes or healthcare working on plans of what to do for ours.  

Hope we do find a way to work together on both sides!

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) about 6 years ago

There is so much good information in the comments...I agree with the tax deduction, not only the rich use it so does everyone else who has a mortgage.

Posted by Zoe Horlick, Buying and Selling,its all about YOUR needs (Schwab Realty, Inc) about 6 years ago

I am so glad to see so many people weigh in, on both sides.

Personally, I don't see how we can fix this mess with either ONLY spending cuts or ONLY Tax increases. I see a nuanced approach where we look at each component and determine if it must 1) remain the same, 2) be modified, 3) be done away with. Unfortunately, I don't think we have time for that anymore!

The Tax Deduction is a little bit different, in my mind. There is not enough evidence to show that the real estate market has recovered, but only that it is creeping in that direction. Getting rid of the deduction now, would devastate the recovery.

With all the emphasis on keeping people in their homes, removing the deduction at this point, effectively changes the annual cost of ownership. Many people bought their homes knowing that they would have this deduction. Was it naive to think it would always be there? Maybe, but here we are!

As part of my so-called nuanced approach, I would hope that the people who are making these decisions will take that into account.  



Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) about 6 years ago

Hello Holly - I have been trying to find a way to leave a meaningful comment and not jump into a political firestorm. 


That said, here goes.  The real problem is not your job or my job but the future of our children and grand-children. Any way we slice it, most successful real estate agents will pay higher taxes whether a compromise is reached or not. We are also likely to see the inevitable belt tightening that will be required to corral our runaway debt. If we don't tackle this problem now, I genuinely believe we are all but doomed and out jobs go away since it will be too late to save what's left.

Posted by Brian Rugg, Sun City TX Real Estate - Georgetown, TX Real Est (Rugg Realty LLC Sun City Texas 512-966-3200) about 6 years ago

I've read where they want to limit the MID to 28% - does anyone know whether that means 28% of your AGI? - or does it mean those in the 28% bracket?  Either way, I don't feel it will have a 'tremendous' affect on the market, but would like some details if anyone knows.

Posted by Jana Holmstrup (Jana Holmstrup - CEO - Kings Mortgage Services, Inc.) about 6 years ago

I certainly agree with you and the negative effect it will have on the real estate market. Certain areas like Oklahoma where the average home price is under $200,000 will be less effected. With the low interest rates, low property taxes and a standard deduction approaching $12,000 a lot of people will be filing using the standard deduction.  I  think that the farther you move toward the East Coast or West Coast the more effected taxpayers will be.

Posted by Bill Zumwalt, Tax Coach, CPA (William T. Zumwalt CPA, CTC "The Tax Coach for REALTORS") about 6 years ago

It is sad that we as a nation are allowing some politicians to divide us into classes. Tax those awful rich people because they clearly don’t deserve what they have and distribute their wealth to others. We’re allowing our politicians to divide and conquer. Get rid of all the tax loop holes, deductions and go with a flat tax. The rich pay more and those earning less pay less, but in the end we as a nation of people still remain equal without being divided into classes.

One more point, before we allow our elected officials to increase our taxes one more penny we should insist on a annual balanced budget. Without it they will continue to spend our money. Did you know that if sequestration takes place our lowest income earners that now pay 10% will jump to 15% on their income tax. That’s a neat 50% increase in taxes for our lowest income earners. Sad – Sad.


Posted by Jane & Jeff Daley, PhD, Scottsdale Real Estate Arizona (Luxury Valley Homes Scottsdale) about 6 years ago

We worked hard in Maryland last session to ensure that changing the Mortgage Deduction in ANY way be taken back off the table - and were successful - though I'm sure it could come back up again.  There was a lot of concern that any kind of change would just be an invitation for further change, percentages decreasing over the years, etc.  It would be a very slippery slope, once the door was opened!

Posted by Gretchen Conley, Howard County MD Real Estate (Long & Foster Real Estate, Inc.) about 6 years ago

It's like watching the Titanic heading for the iceberg, and no one is listening to you even though you can clearly see the potential.  I would like to say I have total confidence in the powers that be doing the right thing, but I'd be lying. 

Posted by Mike Cooper, GRI, Your Neighborhood Real Estate Sales Pro (Cornerstone Business Group Inc) about 6 years ago

Nice job on making an important point while walking on a political high wire Holly.  It will have a huge impact on the ability to get in on the American Dream for our children and grandchildren.  The NAR has a good record in D.C. but, this looks like they are in for the fight of their life.

Posted by Dan Derito (Success! Real Estate) about 6 years ago

Holly - I think this is a deduction which helps all homeowners and makes at least some difference in making a decision to purchase.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 6 years ago

Just to give you a Canadian perspective:  We have never been able to deduct our mortgage interest from our taxable income and our housing market survived the recession in much better shape than the States.  That being said, any change like that should be phased in gradually.   People can't be expected to make such a drastic change to their finances in one fell swoop. I trust the powers that be realize that.

Posted by Dorothy Mazeau (Royal LePage RCR Realty, Brokerage) about 6 years ago

It is all a shell game, cut the loopholes, all entitlements, and tax everyone 100% over $250.K and all corperations at 75% with a writeoff for every dollar they give employees.

Until entitlements are done away with and the rich are poor no one will be happy but politicians

Posted by Charles Stallions Real Estate Services, Buyers Agent 800-309-3414 Pace and Gulf Breeze,Fl. (Charles Stallions Real Estate Services Inc) about 6 years ago

Wow! You've really stirred the kettle with this post. Good for you. This was very well thought out and written. I'm in California where nothing has gone right for years. And I mean that both politically and economically. If they take away the Mortgage deduction it will crush the RE biz in Cali. 

That stated, I'm OK with some modifications i.e. eliminating it on a second home or for homes over a certain dollar value like $1,000,000 or more. If folks can afford to spend a million plus on a home they can afford to pay the piper for all related costs as far as I'm concerned and I R one.

However, we must leave the entry level and/or lower income folks alone or we'll shut off one of the biggest and most important spigots and lifelines holding this fragile recover together. 

Posted by John DL Arendsen, Crest Backyard Homes "ADU" dealer & Contractor (CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS) about 6 years ago

Thanks again for your comments--and keeping them pretty civil!

I know this pushes buttons with everyone, no matter your political stripes, but I believe that is part of the problem. If our politicians could act as rationally as we all have with this discussion, we might make some progress.

NAR sent out a Call to Action today. If you are so inclined, please let your representatives know how you feel about this issue. They are supposed to be doing their jobs, which in my mind means acting in the best interest of the country. They might not always be able to completely follow the party line if they are considering the long-term effects on all of our citizens. As I said earlier, I think this is nuanced issue and there is not necessarily a black and white solution.

Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) about 6 years ago

It never fails, whatever the government gets its fingers into they destroy the way it operates.  Some people made decisions based on the mortgage interst rate deduction and now they may lose it.  And the government wonders why business is standing on the sidelines with their investments until they know how "level" the playing field will be.

Posted by Rob Renk, AE | Fast Fix/Flip Loans for Residential Investors (Center Street Lending) about 6 years ago

Hello and thanks for sharing your thoughts! I was born and raised in Alexandria, VA and yes it has a huge population of government employees, military (ft Belvior) (Quantico) My mother raised us on a government job! :)

Posted by Lisa Michael (Keller Williams Preffered) about 6 years ago

Wow, if you expected this discussion to not get political, looks like you were mistaken.  My two cents, I like anything that encourages home ownership and brings money (ethically of course) to lots of different people.

Posted by Brien Berard, Maryland Real Estate Agents - Laurel Real Estate (Remax Professionals Laurel MD) about 6 years ago

Hi Holly - thanks for getting this discussion going with a great blog.   I'm with you on not using my blog to comment on politics.   But this proposal crosses into economics!   I do hope the politicians strike a delicate balance in their decision because the housing market - our clients personal wellfare and our own businesses - will be affected if the mortgage interest deduction is eliminated.     I personally prefer proposals for staggering any changes over time, and/or limiting the deductions to second homes or past a certain dollar amount...

Posted by M.C. Dwyer, Santa Cruz Mountains Property Specialist (Century 21 Showcase REALTORs) about 6 years ago

Holly, no can get mad when you bring any discussion down to a personal level.  Just a couple of thoughts.  First, the Realtors, Mortgage Industry and Home Builders are all on your side and that's pretty powerful allies.  Seems like most of the political discussion is about capping total deductions, not eliminating them.  I work in a high cost area also--Silicon Valley.  I think the debt and deficit puts us on a crash course with disaster unless we get our fiscal house in order, and that means everyone must bite the bullet.  If no one is willing to give up the benefits they get from the current system, nothing changes and that's worse in the long run than everyone losing some benefits now. 

Posted by Lloyd Binen, Silicon Valley Realtor since 1976; 408-373-4411 (Certified Realty Services) about 6 years ago

Thanks for the thought-provoking post.

I agree with you completely that, in the event the homeowner mortgage deduction goes away, it WILL impact our business.

We all have our political leanings, but regardless which side we are on, the people in Washington (who continue to call themselves "public servants") have not been responsible stewards of the debt, the deficit, and so many other things.

When they retire, they will continue to receive their pay and healthcare, even if they only served one term - quite a gig. In the meantime, they are continuing to run this country into the ground.

If I thought that giving them more of my hard-earned money would make them all of a sudden stop all the waste and abuse, that would be one thing. You & I both know there is no way that will happen.

I try to stay optimistic, but I fear the best of our country is in the past....not the future.....and the children & grandchildren will be paying the price.

Thanks again - good stuff!

Posted by Edith Schreiber, Dallas Area Real Estate (Luxury Homes, Move Up Buyers, 1st Time Homebuyers, New Construction) about 6 years ago

Mortgage interest deduction is a great insentive if taken away will definite affect all home owners and will have a very negative affect on Housing/Real Estate industry as a whole.

Posted by Farooq Khan, Real Estate Broker - CDPE (Pacific Realty Partners) about 6 years ago

Spending cuts.  That's what's needed, not increased taxes.  Across the board.  In our own lives, we cut out the non-essentials when we don't have enough to cover them, so why can't the government do the same. I realize this is simplistic, but when you get right down to it, why does it HAVE to be complicated?

Posted by Victoria CB Trees, Principal Broker (Victoria CB Trees Real Estate Services) about 6 years ago

the problem for me is the definition of "wealthy". Someone earning $250,000 os not wealthy especially if they have student loan debt and two or more children.

Posted by Paddy Deighan JD PhD, Paddy Deighan J.D. Ph.D ( about 6 years ago

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