Author Archives

  • Household Balance Sheet Repair Continues

    We’ve been tracking data from the Federal Reserve’s Flow of Funds and the Bureau of Economic Analysis to get a sense of how quickly households are paying down debts. One of the factors preventing a robust economic recovery is deleveraging, as households and businesses pay down debts and restore net worth to long-run norms.  A consequence of deleveraging is an elevated personal savings rate,… Read More ›

  • How Would a 12% Mortgage Interest Credit Work

    After we examined the final deficit commission report, some readers have asked us to compare how the proposed 12% mortgage interest tax credit would work relative to the present-law itemized deduction for mortgage interest. It is first important to keep in mind that the commission report is just a proposal, so the following contrast is hypothetical. Under present law, in… Read More ›

  • Expiring Housing Tax Provisions under Debate in Congress

    As the debate concerning the extension of the major 2001 and 2003 tax cuts comes to a close (at least for 2010), it is worth taking a look at those housing-related tax rules that have or will expire with the end of 2010.  The congressional debate is primarily concentrated on larger rules like the top marginal rate (will it increase… Read More ›

  • Deficit Commission Presents Final Report: Impact on Housing

    The president’s National Commission on Fiscal Responsibility and Reform has issued a final draft – entitled The Moment of Truth –  of its tax, spending and entitlement policy proposals with the aim of reducing the federal government’s long-term structural budget deficit. The final report incorporates elements from the commission’s initial co-chairs’ proposal and the subsequently issued Domenici-Rivlin plan. The commission… Read More ›

  • Federal Reserve Reports Economy Continues to (Slowly) Improve

    The Federal Reserve’s December Beige Book, which surveys national economic conditions, reports that for the October to mid-November period economic activity continued to grow, albeit at a slow pace.  The report indicates that manufacturing activity increased, with strong growth for auto and metal fabrication. Professional and non-financial services also continued to show steady growth. With respect to housing, the December Beige Book noted that housing markets continue… Read More ›

  • Comparing Deficit Proposals: Impact on Housing

    In the last two weeks, we have seen two comprehensive proposals to address the federal government’s long-term budget deficit. We previously discussed in detail the co-chairs’ draft proposal from the President’s National Commission on Fiscal Responsibility and Reform. This week, a separate group, the Debt Reduction Task Force, which is a project of the Bipartisan Policy Center, presented another proposal… Read More ›

  • MBA Reports Small Declines in Mortgage Delinquencies

    The Mortgage Bankers Association today released National Delinquency Survey statistics for the third quarter of 2010.  The delinquency rate – loans that are not in foreclosure with at least one payment late – fell from a seasonally-adjusted rate of 9.85% in the second quarter of 2010 to 9.13% in the third quarter. The 9.13% rate represents a decrease of 51… Read More ›

  • The Deficit Commission Co-Chairs’ Proposal: Impact on Housing

    The co-chairs of the president’s National Commission on Fiscal Responsibility and Reform have published a discussion draft of budget proposals aimed at reducing the federal budget deficit. The Commission’s ideas deserve to be taken seriously for highlighting and considering the nation’s long-term fiscal challenges, even if some of the proposed policy changes are ill-suited to short-term macroeconomic goals or long-term policy commitments. Among the… Read More ›

  • Deficit Commission Co-Chairs’ Proposal Part 1: The Zero Plan

    (This post is part of a series of entries examining the Deficit Commission Co-Chairs’ Proposal.  For the summary post in the series, please start here.) The Zero Plan Under the co-chairs’ so-called Zero Plan, all tax expenditures would be eliminated, including the mortgage interest deduction (MID), the real estate tax deduction for homes, the capital gain exclusion for principal residences, the… Read More ›

  • Deficit Commission Co-Chairs’ Proposal Part 2: Other Plans

    (This post is part of a series of entries examining the Deficit Commission Co-Chairs’ Proposal.  For the summary post in the series, please start here.) Wyden-Gregg Style Plan A second proposal from the co-chairs’ discussion draft is called the Wyden-Gregg style reform, so named because it borrows concepts from a tax reform proposal that has been championed by Senators Wyden and Gregg.  … Read More ›