The trend in home prices, already bolstered by currency devaluation across the globe, is saying – “careful people.” Any material deficit reduction program, such as elimination of the mortgage tax deduction, whether spun as ethically right or wrong, will bring down the pain not felt since the Great Depression. The cycle bottom for real estate is not due until 2032.
As Martin Armstrong suggested, the 30-year mortgage was created to restore the real estate market in the Great Depression. The price of this innovation, which homeowners view as the norm today, was leverage. It took roughly 80 years for homeowners (Americans) to realize the inherent risks (price) of increased leverage.
U.S. Median Home Price (MHP):
Mortgage tax break in the crosshairs
By Tami Luhby, senior writer
December 2, 2010: 8:06 AM ET
NEW YORK (CNNMoney.com) — Don’t even think of touching the mortgage interest tax deduction in the midst of a fragile housing market.
That was the immediate response of the housing industry, which has come out with guns blazing against the presidential deficit commission’s proposal to overhaul the coveted tax provision.