Tax Proposal Could Cut MBS Issuance by $30 Billion, Analysts Say
- Bill is a modest negative for housing, JPMorgan says
- Proposed changes would make renting cheaper in many markets
The Make-or-Break Week Ahead for Tax Reform
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U.S. agency mortgage bond supply could shrink by $30 billion under the proposed House Republican tax bill, which cuts into consumers’ deductions of interest for housing loans and could raise the cost of home buying, according to JPMorgan Chase & Co. analysts.
The bill released last week caps the mortgage interest deduction at $500,000 and eliminates the deduction for second homes. It almost doubles the standard deduction while eliminating most of the state and local tax deduction, aside from $10,000 for property taxes. That should be “a slight negative” for home prices, analysts led by Matthew Jozoff wrote in a note Friday.