Stephen Kanitz

Supply and Demand: Housing Sales Increase in California and Florida

It makes a lot of sense. Latinos , due to years of inflation in their home countries, detect negative interest rates when they see them. And if you think house prices are near bottom, future real interest rates will be definetely negative. Negative interest rates is a misnomer, because it actually means BANKS pay you interest, rather than vice versa. Plus you get Mortage Interest Tax Deduction on the nominal interest rates.

If this spreads around, there will not be a housing problem as I predicted in my Seeking Alpha in November.

Personal Responsibility and the Housing Bubble

Mortgage Interest Tax Deductions rings a bell ? Would you buy a house knowing that nearly 38% of NOMINAL interest rate is tax deductible. If NOMINAL interest rate is 6% and inflation 4%, REAL interest rate is 2%. So run the numbers again and you discover that 114% of the 2% interest rate comes for free. Would you leverage ?
What mortgage pedllers did was explain these numbers better than I may have done, over and over again.

More On Alternative Methods For Measuring Housing

Interesting. Could it be because Canada Tax code does not allow MID mortgage interest deductions, and therefore does not stimulate housing over indebtness ?


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