The effect of mortgage interest deduction and mortgage characteristics on house prices

2016 ◽  
Vol 34 ◽  
pp. 15-29 ◽  
Author(s):  
Sven Damen ◽  
Frank Vastmans ◽  
Erik Buyst
Keyword(s):  
House Prices ◽  
Mortgage Interest ◽  
Mortgage Interest Deduction

Do People Respond to the Mortgage Interest Deduction? Quasi-Experimental Evidence from Denmark

2021 ◽  
Vol 13 (2) ◽  
pp. 273-303
Author(s):  
Jonathan Gruber ◽  
Amalie Jensen ◽  
Henrik Kleven
Keyword(s):  
House Prices ◽  
Housing Demand ◽  
Middle Income ◽  
Financial Decisions ◽  
Mortgage Interest ◽  
Tax Subsidy ◽  
Quasi Experimental ◽  
Major Reform ◽  
Mortgage Interest Deduction ◽  
Zero Effect

Using a major reform that scaled back the mortgage interest deduction for middle- and high-income households in Denmark, we study how tax subsidies affect housing decisions. We present four main findings. First, the mortgage deduction has a precisely estimated zero effect on homeownership for high- and middle-income households. Second, the mortgage deduction has a clear effect on housing demand at the intensive margin, inducing homeowners to buy larger and more expensive houses. Third, the deduction has sizeable effects on household financial decisions, inducing them to increase indebtedness. Finally, the reduction of the tax subsidy lowered equilibrium house prices. (JEL G21, G51, H24, K34, R21, R31)

scholarly journals Capping the Mortgage Interest Deduction

2007 ◽  
Vol 60 (4) ◽  
pp. 769-785 ◽  
Author(s):  
John E. Anderson ◽  
Jeffrey Clemens ◽  
Andrew Hanson
Keyword(s):  
Mortgage Interest ◽  
Mortgage Interest Deduction
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