As the tax deadline draws closer, a number of American households are expected to capitalize on the mortgage interest deduction to save money on their tax bills.
Government data indicates that in 2010, an estimated 33 million households used the deduction and cumulatively saved roughly $88 billion. However, as the national deficit continues to grow, some lawmakers have labeled this a "tax loophole" and have called for its closure, according to the National Association of Home Builders.
If these lawmakers have their way, the deduction could be done away with by as early as next tax season.
"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.
Should the mortgage interest deduction be eliminated, the industry group worries it could have a damaging effect on property values across the country and subsequently cause a drop in activity among mortgage lenders and overall home buying requests.
