There is one major political topic that has been mysteriously absent from both major presidential campaigns during this year’s presidential election season… housing.
Nick Timiraos noted this in the Wall Street Journal in early September. Here we are in late October, four debates later, and nothing has really changed. Barely a peep about housing from Obama or Romney.
Here’s one possible explanation: Neither wants to have a serious discussion about housing because they would have to talk about the mortgage interest deduction, which more and more is looking like it will need to be severely limited or possibliy even eliminated no matter who gets elected.
The burgeoning federal debt makes it unlikely that the mortgage interest tax deduction will survive in its present form, but any proposed changes to the tax break for homeowners will likely spark a fierce debate over the fundamentals of the U.S. housing market, the value of homeonwership, and consumer behavior.
That’s according to panelists at a housing forum hosted Friday by real estate search and valuation company Zillow Inc. and the University of Southern California’s Lusk Center for Real Estate.
“I think its entirely likely that something big is going to happen (with the MID) starting next year with either administration,” said Jason Gold, director and senior fellow at the Washington, D.C.-based Progressive Policy Institute, an independent think tank.
The idea of eliminating or reducing the mortgage interest deduction has been popping up for the last couple of years. A year ago I said that it was “unlikely that any of the current talk of eliminating the mortgage interest deduction will come to pass,” but the notion seems to be gaining some serious momentum.
MARTIN: Why is it that economists seem to be pretty – I would not say united on this point, but there seems to be a growing consensus among economists that this is bad public policy, this is bad economic policy.
GEEWAX: Well, we have to make choices among different kinds of ways of dealing with the budget deficit and they say this is a good one to go after because it really doesn’t make all that much economic sense in today’s climate to continue to push this. For example, one might argue that, yes, the American dream of the 1950s was to buy a home, but if you talk to young people today, their American dream might be quite different. What they really want is a great education and mobility so that they could pursue the jobs they want.
Could it be that both candidates realize that the mortgage interest deduction’s days are limited, and neither wants to go on record supporting its demise? If I were a political strategist, that would be a good reason to encourage my candidate to avoid housing as a topic.