“The potential mortgage cap would hit those of us in the Bay Area harder than in other parts of the state or county because the higher cost of housing here with a Bay Area median housing cost in the $800,000 range and a state cost in the $550,000 range. The potential mortgage cap definitely represents a loss for Californians not only financially but it could act as a disincentive to move up buyers looking at purchasing a larger more expensive home.” – David Kerr, Senior Sales Associate
Property owners in California, Florida and New York have the most to lose if Congress limits tax deductions for interest payments on home mortgages, according to a Bloomberg analysis of Zillow data.
Assuming a 20 percent down payment, the three states together are estimated to have more than 80,000 homes currently listed for sale where the mortgage could reach at least $500,000, the limit laid out for new home sales in the House Republican tax plan.
The House bill “would place the American Dream further out of reach for millions of Americans,” Elizabeth Mendenhall, president of the National Association of Realtors, wrote in a letter to House members in November.
In California, that’s 44 percent of homes on the market. Colorado and Massachusetts follow with one third of the number of homes on the market.
Hawaii, though it has fewer homes for sale than California, New York and Florida, could see a high percentage of mortgages that would be affected by the proposed cap — more than half.