Only a quarter of Americans deduct mortgage interest from their taxes, but the deduction appears to be a sacred cow of the tax code. Some argue it's unfair and should be scrapped.
In the past few years, as concern has grown over the U.S. budget deficit, lawmakers periodically look at whether they should end one of the most popular tax breaks: the mortgage interest deduction.
And then they back off.
"Given the still precarious status of the nation’s housing markets, and past mistakes made by government to prop up these markets, it is fair to say that Congress needs to tread carefully when addressing policies that affect real estate," Sen. Orrin Hatch, R-Utah, said last week during a discussion of the issue by the Senate Finance Committee. "With respect to the tax code, there are a number of proposals that would alter the treatment of housing, but any changes should happen only with the utmost care and significant transition periods."
He went on to oppose a proposal by President Barack Obama to reduce the value of the deduction for homeowners in the highest tax brackets.
Realtor and homebuilder groups also oppose curtailing or eliminating the deduction, which dates to the first federal tax code in 1913.
Former residents celebrate their childhood homes and, in some cases, bemoan change. Natives of Brooklyn are especially active.
If you have an active neighborhood association, you may get updates on Facebook.
New Yorkers are taking neighborhood sharing on Facebook a step further, uploading old photos of their neighborhoods and posting thousands of comments.
“It’s like we’re all sitting around on lawn chairs on the sidewalk in summertime, laughing and telling stories,” Maria George, 47, a former resident of Williamsburg, Brooklyn, told The New York Times about her participation in "The Neighborhood: Who Says You Can’t Go Home?"
Kathy LaPolla DeStefano was happy to leave Williamsburg in 1980. She's now an elementary schoolteacher near Fort Lauderdale, Fla.
She's discovered through Facebook that she can go home again, back to the Williamsburg of her childhood.
"I’ll be up commenting on people’s posts until 3 in the morning," DeStefano told The Times. "I’m like, 'Kathy, you have to stop this!'"
Homeowners in New York and Hawaii are in the best position, while those in Nevada, Arizona and Florida are most likely to be underwater.
We write often about people who owe more on their home mortgage than their home is worth, but — at 22.5% of Americans with mortgages — those people are the minority.
One-third of homeowners don't have mortgages at all but own their properties free and clear.
Of those who have mortgages, 24.6% have more than 50% equity and 48.5% have at least 25% equity, even after the precipitous drops in home values of the past few years.
Americans had $6.2 trillion in home equity at the end of June, syndicated columnist Kenneth Harney reports, down from $13.2 trillion in 2005. He asked CoreLogic to put together some numbers for his column.
The states where homeowners have the most equity are New York, where 48.8% of homeowners have at least 50% equity, and Hawaii, where 43.7% report that distinction.
Other states where homeowners are doing well are Connecticut, Massachusetts and Pennsylvania, along with the District of Columbia.
And where do people have the least equity? You get three guesses, and the first two don't count.
The real-estate crisis has changed many people's views of renting versus buying. Sometimes being a homeowner means throwing more money away.
Back in the days of rising real-estate prices, anyone who rented rather than owned a home was accused of "throwing away money."
Now that many of us homeowners have lost all our equity and then some, we're not so sure who was throwing their money away.
One lesson of the past few years is that renting is sometimes a better financial choice; that ephemeral "equity" is often not worth chasing.
"A few groups that should really think hard before they buy are military people and professional athletes. Both of these groups move often and in general would most likely be much better off to stay renters until they are settled in a city where they are sure they will be staying for a long period of time," writes Leonard Baron, a certified public accountant, university professor and real-estate author, at the Zillow blog. "Additionally, parents considering buying properties for their college students to live in during school will be probably end up being a short-term ownership situation – skip the hassle!"
He suggests five years as the break-even point for owning, but even that rule of thumb will vary depending upon the costs of renting versus the costs of owning in your particular situation.
Survey of real-estate agents finds that boomers still are interested in home purchases, but the desires of older and younger boomers vary.
Baby boomers are delaying home purchases because of the economy, but many still want to buy second homes or retirement homes, according to a Coldwell Banker survey of real-estate agents.
"The baby boomer generation has driven the U.S. economy for years, and like many Americans, they may be anxious about their next real-estate decision," Jim Gillespie, CEO of Coldwell Banker Real Estate, said in a news release. "I know baby boomers are a very diverse group and cannot be described in generalities, but our survey clearly indicates that those boomers who are financially secure are actively seeking to buy their retirement home, or a second home, and they are taking advantage of the opportunities and value available in today's market."
We'd be surprised to read a survey of real-estate agents that found their clients did not want to buy homes, but let's see what else the Coldwell Banker agents had to say about their baby boomer clients.
A California house rented by Britney Spears is going up for auction. Other stars have cut the asking prices on homes that haven't sold.
In this market, a celebrity pedigree won't always sell a house, even a nice house that's priced at way less than $49 million.
The house rented by Britney Spears, first listed for sale for $9.9 million in 2009, is up for auction. The opening bid is $4.99 million, quite a drop for the 10,000-square-foot home on 1.2 acres.
This isn't the only celeb property languishing on the market. Erika Riggs at the Zillow blog put together a list of celebrity properties that have recently undergone price cuts, including homes owned by Avril Lavigne and the late Janet Leigh.
Risk professionals are more pessimistic about housing recovery; they also expect the high level of foreclosures to persist for another five years.
For the past few years, we've been quoting experts who predict a recovery in home prices in the next year or two.
Bank risk managers disagree. In a survey by FICO, the credit-score company, 59% of bank risk managers said they didn't foresee housing prices returning to 2007 levels until at least 2020. That was a decidedly more pessimistic outlook than the same group had earlier this year.
"Housing has been an enormous drag on the economy for over three years as U.S. households lost trillions of dollars in equity," said Andrew Jennings, chief analytics officer at FICO and head of FICO Labs, in a news release. "While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation. This puts the devastation of the housing crash into perspective."
That's bad news for the nearly one-quarter of Americans who owe more on their mortgage than their home is worth and are hoping for time to help them get back into positive equity territory.
The American Planning Association has honored 10 diverse communities for their sense of place. Do you live in a great neighborhood?
I once lived in a neighborhood that was considered a fabulous location. It was close to downtown — but not too close — full of cute 1930s houses, convenient to activities I enjoyed and near friends.
And I hated it, because it just wasn't neighborly. I persuaded my partner to move back to our old, less convenient but much more neighborly neighborhood. Location matters, but neighborhood sometimes matters even more.
The American Planning Association has just come out with its list of the 10 best neighborhoods in America. The criteria include architecture that's visually interesting, a design that encourages social contact and a memorable character.
"You don't feel like you're in Everywhere, USA," said Denny Johnson, APA public-affairs coordinator, in USA Today.
If you think you'd like to live in one of these neighborhoods, Curbed put together a collection of homes for sale in some of them.