Originally Posted by Brock
You think there's 40 percent profit in building a house? Maybe in some places where things are artificially more expensive like California. It definitely doesn't hold true here. Gross profit of 20 percent is a vain hope around here.
I don't know if it's 40 percent or not. I was just throwing out a number. But I have a hard time believing that prices aren't inflated as a result of the deduction. Imagine what would happen to house prices if the mortgage deduction was eliminated. I have to think that they would go down, which kind of implies that they're higher because of the deduction. At least, I think that's sound logic.
I'm not really sure how it relates to new construction versus the sale of existing homes. I have this inkling that homeowners got a big boost in their home value when the deduction was created, though. All of a sudden people could buy your home for a significantly lower monthly payment; that's got to have a payoff for you.
I have no idea when the deduction was created, though.