Housing Tax Deductions and Single-Family Housing Demand

The effect of mortgage interest and local property tax deductions upon single-family housing demand in the U.S. is examined for the 1994-2003 period. A multi-equation model is developed to simulate the impacts from partial and complete elimination of the deductions. The results indicate that the deductions have moderate effects on housing demand. Complete elimination of the deductions could result in as much as a 12 percent decline in the annual number of single-family housing units that are purchased.

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	Schmidt, James R James W. & Helen A. Hanson College Professor of Economics Expertise: Applied Econometrics Economics CBA 358 P.O. Box 880489 University of Nebraska-Lincoln Lincoln, NE 68588-0489, USA Phone: (402) 472-2315 Fax: (402) 472-9700 jschmidt2@unl.edu	Schmidt, James R	Economics
	Anderson, John E Baird Family Professor of Economics Expertise: International - Europe Public Finance Property & Sales Tax Public Policy Analysis Taxation Economics CBA 214 P.O. Box 880489 University of Nebraska-Lincoln Lincoln, NE 68588-0489, USA Phone: (402) 472-1190 Fax: (402) 472-9700 janderson4@unl.edu	Anderson, John E	Economics