A day after shares of homebuilders sold off on the Republican’s tax plan proposal, White House Economic Adviser Gary Cohn told Bloomberg in an interview that the provision capping the mortgage-interest deduction on home sales at $500,000, below the current cap of $1M for couples filing jointly, will not hurt home sales. “The ability to deduct interest is a component that allows you to buy a bigger house, not what drives you to buy a house,” Cohn told Bloomberg in an interview. Publicly traded companies in the homebuilder space include Beazer Homes (BZH), CalAtlantic (CAA), D.R. Horton (DHI), Hovnanian (HOV), KB Home (KBH), Lennar (LEN), M.D.C. Holdings (MDC), PulteGroup (PHM) and Toll Brothers (TOL).
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