By Sam DeBord
When talking to associates and the public about real estate topics, it’s important to be educated on the issues that we value most as REALTORS®. Government fiscal and tax policy can be confusing issues that many REALTORS® don’t feel they have time for. Still, anyone working in the industry is bound to strike up a conversation that leads to the current budget shortfall and potential ways to fix it. Reducing or eliminating the Mortgage Interest Deduction is often suggested.
REALTOR® advocates need to know a few quick facts to show our clients and our communities why this deduction is so important to homeowners, families, and the country as a whole. This infographic makes the major points that every REALTOR® should be able to recount, without getting mired in the muck of too much tax policy:
The statistics make it plainly clear how valuable the Mortgage Interest Deduction is to Americans. Roughly three out of every four homeowners with a mortgage claims the deduction.
With an average tax deduction of $2,713, the MID is a major savings for home buyers who are investing in their futures. Without that deduction, we’d see some significant increases in taxes for middle-class Americans.
The typical taxpayer who claims the MID is under 45 years old, married, and has children. Their household income is under $200,000. This is the quintessential working family that is in the process of building a nest egg for their children’s future and long-term for retirement. Saving those tax dollars each year is encouraging them to make investments in their community.
One of the biggest concerns with proposals to change the MID would be the effect on home prices. Values of real estate across the country would be projected to fall 15 percent if the MID were eliminated altogether. After finally beginning to recover from the previous downturn, real estate markets would be devastated by another such a drastic drop in prices.
Real estate is one of the biggest components of the national GDP, comprising about 15 percent of the total. Consumer spending creates jobs and economic growth, and real estate has always been a leading driver for consumer spending. Our national economic well being is, and always has been, tied to a healthy real estate market.
As REALTORS®, we’re obligated to speak up when real estate issues are on the table. We know better than anyone the importance that the real estate market plays in every American’s financial well-being, whether or not they own a home. Political arguments may espouse some lofty theories, but the real-world facts support our position.