Homebuilders come out swinging against the GOP's tax plan

  • The National Association of Homebuilders on Thursday ramped up its opposition to the GOP's tax plan. 
  • At issue is the mortgage-interest deduction, which will reportedly be capped on new mortgages worth $500,000. 
  •  "We're worried about a national housing recession," Jerry Howard, the NAHB's CEO, told Business Insider. The group is concerned that middle-class homeowners may see their property values fall. 

The National Association of Homebuilders on Thursday said it was opposing the GOP's tax plan more strongly after details of the mortgage-interest deduction emerged. 

Several reports showed that the tax plan caps the mortgage-interest deduction, which subtracts interest payments from homeowners' taxable income, on new homes at $500,000. This could dampen the benefit of the deduction outside of the most expensive housing markets, and may lower home values. 

RELATED: President Trump speaks about tax reform

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President Trump speaks about tax reform in Harrisburg, Pennsylvania
US President Donald Trump speaks on tax reform, at Harrisburg International Airport on October 11, 2017 in Middletown, Pennsylvania. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
U.S. Secretary of the Treasury Steven Mnuchin waits for U.S. President Donald Trump to speak about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
U.S. President Donald Trump is obscured by a teleprompter as he speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
Director of the National Economic Council Gary Cohn speaks on a mobile phone as U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
People listen as U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
US President Donald Trump steps out of a limousine to board off Air Force One before departing from Harrisburg International Airport on October 11, 2017 in Middletown, Pennsylvania. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
US President Donald Trump speaks on tax reform inside a hangar at the Harrisburg International Airport on October 11, 2017 in Middletown, Pennsylvania. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
US President Donald Trump speaks on tax reform, at Harrisburg International Airport on October 11, 2017 in Middletown, Pennsylvania. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
U.S. President Donald Trump speaks about tax reform in Harrisburg, Pennsylvania, U.S., October 11, 2017. REUTERS/Joshua Roberts
US President Donald Trump speaks on tax reform, at Harrisburg International Airport on October 11, 2017 in Middletown, Pennsylvania. / AFP PHOTO / MANDEL NGAN (Photo credit should read MANDEL NGAN/AFP/Getty Images)
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On Sunday, the powerful homebuilders' lobbying group said it would not support the legislation. 

"The details that are coming out show that the House Republicans are picking large corporations and wealthy Americans over small businesses and middle-class American homeowners," Jerry Howard, the NAHB's CEO, said. 

Howard estimated that 7 million homes would be excluded from the mortgage-interest deduction, amounting to about a third of the homes in California. 

"You're talking about potentially causing housing recessions in some of the biggest markets in the country, and those kind of recessions tend to have spillovers," Howard told Busines Insider. "We're worried about a national housing recession."

SEE ALSO: A part of the new GOP tax plan will be a tough sell in New Jersey, New York, and California

The trade association had been working with lawmakers to replace the mortgage-interest deduction — which lets homeowners subtract interest payments from their federal tax bill — with a tax credit offering the same incentive.

"The House Republicans have violated the president's charge of doing a tax reform that helps middle America," Howard added. "Values of [Americans'] homes are at risk of declining. Baby boomers ought to think about putting off retirement for a couple of years because they may not have the equity in their homes that they thought they did."

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