Its not the tax code thats to blame, its the current low interest rates combined with the apparently increasing desire by the lenders to make risky loans. 0 Down, Interest Only, Variable 3% rates, etc.
Those items have turned the person who could only afford $1000 a month payment on a $150,000 home into a potential buyer for a $300,000 to $400,000 home.
The big builders, the early speculators, and to a lesser degree the new flippers have taken advantage of the interest rate/lending climate and steadily driven the $150,000 home upwards in price towards $300,000 or more.
Tax code changes won't kill the bubble, Lending practice changes and higher rates will.
$400,000 borrowed on Interst only rate only takes $1,800 a month to service. Least until it all blows up. |
