There are currently a number of tax deductions available to mortgage borrowers that help them save money every year. The most significant is arguably the mortgage interest deduction available to borrowers in the first year of homeownership.
However, this savings device, which real estate records indicate is utilized by tens of millions of middle-class households every year, could be eliminated by as early as next tax season, according to the National Association of Home Builders.
"With many local housing markets across the nation just now showing signs of a long-awaited spring thaw following the worst downturn in decades, protecting the mortgage interest deduction and promoting tax policies that will keep homeownership affordable is very important to create jobs and keep the economy moving forward," said NAHB chairman Barry Rutenberg.
As the government looks for new ways to narrow the growing deficit, some lawmakers have labeled this deduction a tax loophole and have called for its immediate closure. But NAHB claims that such action could result in the further devaluation of home prices, lead to significant job loss and slow an overall economic recovery.