Tax reform

The lower mortgage interest deduction cap in House Republicans' tax bill would create a disincentive for existing homeowners to sell and add to already tight housing inventory concerns, according to Black Knight.

A provision in the original Senate tax reform bill would have required companies acquiring mortgage servicing rights to pay taxes upfront for their anticipated servicing income.

A provision in the tax bill passed by the House of Representatives would only intensify the housing crunch by crippling affordable housing construction, developers and local government officials say.

The financial services industry has cheered a proposed reduction in the corporate tax rate, but a lower rate could force Fannie Mae and Freddie Mac to write down assets, increasing the odds that the companies will need Treasury support.

The Senate tax reform proposal could force servicers to pay tax upfront on income that is currently tax deferred, according to the Mortgage Bankers Association and the Consumer Mortgage Coalition.

Sales of previously owned U.S. homes rose to a four-month high, indicating demand was firming at the start of the quarter as the impact from the late summer hurricanes faded, according to a National Association of Realtors report.

Mortgage rates moved to their highest mark since July and the 10-year Treasury yield ticked up 6 basis points, according to Freddie Mac.

As Congress debates tax reform and which deductions to remove, a majority of homeowners from both parties worried that rising property taxes could force them to sell.

The Senate tax proposal released Thursday would cap the mortgage interest deduction for properties worth $1 million, a reversal from the House plan that would have limited the deduction to $500,000.

The elimination of private activity bonds “would throw gasoline on a housing shortage," said John Chiang, California's treasurer.

The treatment of local property taxes and the mortgage interest deduction in the House Republicans' tax plan would cause homeowners in high-cost states like California to incur much higher tax bills.

Here's a look at the 12 housing markets with the largest percentages of mortgages over $500,000 — the new threshold House Republicans have proposed for the mortgage interest deduction in their tax plan.

Pricey U.S. housing markets, from the New York suburbs to California's coastal cities, could take a direct hit under the tax-reform bill released by House Republicans.

A House Republican tax proposal that infuriated housing groups and sent homebuilder stocks sliding would only have a modest impact on the market for new homes and could end up being a net positive for the industry, according to Keefe, Bruyette & Woods analysts.

Top banking executives called the Republican tax plan an important first step toward tax reform and economic stimulus, but questions immediately arose about whether trade-offs and complexities in the bill would undercut it.

Hopes that tax reform might soften a weakening of the mortgage interest deduction were quickly dashed as the GOP plan landed a double punch on the incentive cherished by the mortgage and housing industries.

But the home mortgage deduction for existing mortgages would be preserved, according to a two-page outline of the House GOP tax reform bill. Meanwhile, homebuilder stocks initially plunged.

A group backed by billionaire industrialists Charles and David Koch unveiled a television and digital campaign that argues "corporate welfare" threatens Republican efforts to dramatically alter the U.S. tax code.

Some in the housing industry expressed concern that the plan would double the standard deduction to $24,000 for married couples and $12,000 for individuals—a move that could dramatically lessen the impact of the mortgage interest write-off.

The need to raise the U.S. debt limit, pass a budget, provide relief for victims of Hurricane Harvey and enact flood insurance and tax reform will dominate the remaining legislative calendar this fall.