he housing market and the housing industry have escaped a potential blow on several fronts now that lawmakers have at least partially resolved Washington’s “fiscal cliff” budget morass. A bill passed by Congress on Tuesday pulls the nation back from the brink of end-of-year tax hikes and spending cuts contains several provisions that are favorable to housing.
Chief among the provisions is one that provides an additional year of relief for troubled homeowners selling their properties. Another that should benefit some homeowners is the restoration of a tax deduction for mortgage-insurance premiums, including premiums paid to the Federal Housing Administration and private mortgage insurers alike. That deduction had been absent for a year after expiring at the end of 2011.
In addition the housing industry also dodged a bullet on a big issue—potential limits on itemized deductions, including the cherished mortgage-interest tax break. Last year, there was talk among politicians in both parties of capping those deductions at a particular level but those limits did not come to pass as part of the fiscal cliff deal.
With housing predicted to fuel the economy in 2013 with expectations by some for it to return to pre-boom numbers by year end (starts and sales); its time to get back to building.