Panelists at a Standard & Poor’s housing summit in New York say the mortgage tax deduction is a key component to the housing industry. Chuck Robida, Experian chief scientist, said that he expects that it will be difficult for housing markets to recover without the mortgage interest tax deduction, especially in larger MSAs. However, demand is something that will likely increase during the healing process. Christopher Mayer, a Columbia business school professor, added that the stability of owning a home is something all human beings want. Mayer noted that there is a case for gradually swapping out the mortgage interest tax deduction with some kind of credit to boost affordable housing options such as helping first-time homebuyers make a down payment. He sees the mortgage interest tax deduction as subsidizing people to buy higher-priced homes. While unemployment is still a factor in indicating potential for default, increasingly being underwater is more of a driver for default, according to Diane Westerback, a managing director in S&P’s structured finance group. Mayer expects that, considering the number of houses on the market and mortgages that are in delinquency, the direction of home prices is likely down. Poonka Thangavelu is a HousingWire contributor based in New York.