New Mortgage Interest Deduction Cap Could Help First Time Homebuyers
First time homebuyers may have just gotten a bit of a boost when it comes to being able to afford a home. The boost comes through a new mortgage interest deduction cap. According to reports, the cap will cause sellers to lower prices.
"Renters who are looking to buy an affordable starter home might find that they have more options now, as the new deduction limit should put downward pressure on home prices, or we should at least see sellers lower their prices in the short term," an analysis from RentHop.com said," according to National Mortgage News.
"Nonetheless, this does not mean that it will be easier for low- and middle-income households to buy houses, as high-income households who want to buy can still compete and drive up prices for lower-end properties."
As the report states, the more expensive it becomes to afford a home, the more prospecting buyers may turn to or maintain a rental agreement. It will in turn be a lot more difficult for sellers to find buyers unless they lower the prices to move the inventory.
To learn more about how some of these prices have been impacted and just how Long this could last, click on the image above.
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