Daily Archives: May 1, 2013

Coasts Clean up on Mortgage Deduction | Pound Ridge Real Estate

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Taxpayers in states along the East and West Coasts are grabbing the lion’s share of tax savings from the mortgage interest deduction, the third largest tax expenditure that saved taxpayers filers deducted about $72 billion in 2011.

The benefits of the mortgage interest deduction skews heavily toward certain states, particularly along parts of the East and West Coasts.  The percentage of tax filers deducting mortgage interest ranges from nearly 37 percent in Maryland to 15 percent in West Virginia and North Dakota.  The average mortgage interest deduction for all tax filers (not just those taking the deduction) varied from a high of $4,580 per tax filer in Maryland to a low of $1,192 per filer in North Dakota, according to a new report released yesterday by The Pew Charitable Trusts. The national average was $2,713.

The variation across metropolitan areas within states is even greater, with tax filers in larger areas generally claiming the deduction at much higher rates and greater average amounts than filers in medium- and small-size areas. In Texas, for example, the state’s highest claim rate-in the Austin area-is 4 times larger than the lowest rate, in the Odessa area.

With the housing recovery and higher home values, the mortgage interest deduction is expected to grow and become more of a target for tax reformers in Washington.  Before the onset of the housing crisis in 2007 the total mortgage interest deducted by tax filers peaked at $543 billion in deductions and roughly $85 billion in forgone revenue.  Between 2007 and 2010, the total amount deducted fell 28 percent, and the number of claims declined by 12 percent.

via realestateeconomywatch.com

Home Prices Reach 2003 Levels; Every Case-Shiller Market Posts Yearly Gain | Chappaqua Real Estate

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Data through February 2013, released today by S&P Dow Jones Indices for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, showed average home prices increased 8.6 percent and 9.3 percent for the 10- and 20-City Composites in the 12 months ending in February 2013. The 10- and 20-City Composites rose 0.4 percent and 0.3 percent from January to February.

All 20 cities covered by the indices posted year-over-year increases for at least two consecutive months. In 16 of the 20 cities annual growth rates rose from the last month; Detroit, Miami, Minneapolis and Phoenix saw slight annual deceleration ranging from -0.1 to -0.4 percentage points. Phoenix continued to stand out with an impressive year-over-year return of +23.0% while Atlanta and Dallas had the highest annual growth rates in the history of these indices since 1992 and 2001, respectively.

In February 2013, the 10- and 20-City Composites posted annual increases of 8.6 percent and 9.3 percent, respectively.

“Home prices continue to show solid increases across all 20 cities,” says David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices. “The 10- and 20-City Composites recorded their highest annual growth rates since May 2006; seasonally adjusted monthly data show all 20 cities saw higher prices for two months in a row – the last time that happened was in early 2005.

“Phoenix, San Francisco, Las Vegas and Atlanta were the four cities with the highest year-over-year price increases. Atlanta recovered from a wave of foreclosures in 2012 while the other three were among the hardest hit in the housing collapse. At the other end of the rankings, three older cities – New York, Bostonand Chicago – saw the smallest year-over-year price improvements.

via realestateeconomywatch.com