Affordable Housing & Tax Pt. 1: Current Conditions; Home Mortgage Interest Deduction
May 23, 2024 by According to the National Association of Home Builderss (NAHB) 2024 housing affordability metrics, an estimated 49% of households cannot afford a $250,000 home. The criteria is made up of 3 main metrics: mortgages, property taxes, and insurance. Furthermore, in 2022, 22.4 million households renters spent over 30% of their monthly incomes on rent and utilities. Of that number, 12.1 million spent half of their income towards housing costs. This has brought the home mortgage interest deduction (HMID) under scrutiny. Under HMID, homeowners who take out a mortgage can deduct mortgage interest payments on a loan secured by a primary or secondary residence. However, according to Congressional Research Service (CRS), “The lower itemization rate and the fact that higher-income homeowners have larger mortgage balances on average means that the benefits of the mortgage interest deduction disproportionately accrue to taxpayers at the upper end of the income distribution.”