Maybe tax benefits of homeownership should end

Abolishing the mortgage-interest deduction would replenish the nation's coffers. (Flickr photo by hto2008)

If anything I have posted so far hasn’t made me a pariah among my professional peers, this piece may well do that.

A column I read in the New York Times on Saturday got me thinking, again, about the question of U.S. government policy of supporting home ownership (which has fallen a couple of points to around 67 percent since the housing bust) by allow a tax deduction for mortgage interest.

In his provocative article, Joe Nocera quotes several economists and questions the policy.  Why does the policy represent a cow so sacred that it cannot be slaughtered, not even touched?

That cow, of course, is that that home ownership fulfills the American dream. To my mind, heretical as it may be for a real estate broker to ask, hasn’t the time come to send that old cow to pasture?

Many experts are hovering around a crystal ball

When it comes to predicting the direction of the housing market, there is no shortage of opinions.  Below you’ll find excerpts from “The Soothsayers” section of my forthcoming e-newsletter,  Realty Digest, which I write every two weeks.  My next newsletter will be issued around noon on Friday, Nov. 4.

Take your pick from the excerpts, draw your own conclusions and forward your comments to this blog:

Thanks to "spratmackrel" for this image

• Housing starts will increase by 36 percent next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics.

• First American CoreLogic predicts continued declines in most markets, albeit at a slowing rate, for the next six months, followed by a rebound in the spring.

• Harvard economist Edward Glaeser doesn’t foresee property values rising to previous levels even in attractive locales. “The harsh reality is that real estate prices that go up come down. I’ve found that for every real $1 increase in local market prices over a five-year period, prices go down 32¢ over the following five years,” Glaeser says.