Very few middle-class households have enough mortgage interest and other deductions to justify itemizing. They get the same deduction whether they rent or buy. We have thus removed what was once an important subsidy to homeownership. Maybe that’s the right policy but it’s changing the housing market.
...The National Association of Homebuilders estimates that regulations and government mandates add almost $94,000 to the cost of a new single-family home. This is on top of higher materials costs. The same study shows rising softwood lumber prices over the last 12 months have added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home. That increase in multifamily value means that households pay $119 a month more to rent a new apartment.
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