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Comment by mevile | Hacker News Reader

> the subsidies went away

If you're talking about being able to claim mortgage interest on your taxes then that hasn't gone away yet. I don't know what other kinds of home owner subsidies exist.

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I've never understood why people make such a big deal out of that deduction. It doesn't add up to very much in my experience - not enough to make it worth considering in one's decision about which house to buy, much less one's decision about whether one can afford to buy a house at all. If you're relying on the mortgage interest deduction to make homeownership affordable, you.... well... it's going to really hurt the first time an appliance breaks or you have to call the plumber or whatever. Better to keep renting.

> I've never understood why people make such a big deal out of that deduction.

It contributes to economic unfairness. Paying less taxes just because one owns a house is not optimal use of tax dollars when people who can't afford a house are doing pretty badly.

A homeowner pays less in housing costs (mortgages aren't subject to rent increases by a landlord) and pay less taxes than someone who rents who makes the same and they get to keep all the equity. It's incredibly unfair.

The historical reason for the subsidy is to increase home ownership. It's not really helping anymore.

That's the part I understand. What surprised me, when I bought a house, was that for all the talk about what a big deal this deduction was supposed to be, and how difficult it would supposedly be to eliminate it, the actual effect on my total housing cost was effectively negligible. They could roll it back tomorrow and I'd never notice.

You must not pay a lot of interest. I deduct this and my property taxes and it's thousands of dollars less that I pay each year. It's significant.

That's because this is a time of historically low interest rates. If rates were 12%, like they were when I got out of school, you'd definitely notice.

I've owned three homes and never taken the mortgage interest deduction. The historical reason is based on 20% down mortgages for less-than-2x-annual-income housing. That's clearly not much the case any longer. Now it's expected by the NAR and the general real estate industrial complex.

I've never understood why people make such a big deal out of that deduction

The reason is that this, like nearly everything else in this thread, only applies to the coasts or for houses that would be considered quite expensive elsewhere.

The median home value in St. Louis, for example, is less than $150k. The standard deduction for a married couple filing jointly is $12,600. The math is pretty simple from there.

I think it's because many people confuse deductions with credits, to confused a deduction for a credit makes it seem like a huge amount than the fraction amount the deduction translates to with taxes due.

For most people middle class and higher it lowers the effective interest rate by a third or more. That's a much lower interest rate and changes the math a lot.

Hm. I guess it doesn't matter to me because I bought at a time when the interest rate was practically nothing anyway (my mortgage is at 3.5%). I can see how it would have been a big motivating factor for people in my parents' generation, who are of course the same general class of people who would have been trying to convince me that the mortgage interest deduction was a big deal.

First-Time Homebuyer Credit. They stopped it after 2010 I believe

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