HOUSINGNEWS REPORT
8 ECONOMISTS PREDICT 2018 HOUSING MARKET TRENDS
national level. That said, some think that this legislation may reduce the value of high-end housing and that there will be a “trickledown” effect that will reduce housing values across the country, but I do not think that this will be the case.
somewhat. It’s worth mentioning that an upper-middle-class home in a state like California can sell in the neighborhood of $1 million, so this may contribute to softness in that price range going forward. GARDNER : There are two changes to the income tax structure that could potentially have a significant impact on homeowners and the housing market. The first is the mortgage interest rate deduction. The current plan calls for this to be capped at $750,000 from $1,000,000. In and unto itself, this can be considered a tax on wealthy households, but there have been almost 100,000 home sales so far this year where the mortgage loan was over $750,000 (almost 4 percent of total sales), so the effect would be felt by far more than just the wealthy. This change will disproportionately affect high-cost markets in California, New York and Hawaii. To a lesser degree, the impact will also be felt in Seattle, as well as in parts of Colorado and Arizona. The final tax bill also eliminates the deduction for interest on home equity loans which is currently allowed on loans up to $100,000. This is significant because it will largely affect the growing number of home owners who are choosing to remodel their home rather than try to find a new home in a supply-starved market.
(SALT) to $10,000. Again, the effects will be substantial, especially in areas such as California, New York and New Hampshire where taxes are considerable. While this measure will certainly have a dampening effect on housing, I do not believe it will lead to a substantial drop in home values.
The second proposal calls for a cap on state and local tax deductions
“High-cost areas on the coasts and elsewhere will see that these new limits on mortgage interest deductibility and state and local taxes will temper market activity somewhat.” — KLEINHENZ “Some think that this legislation may reduce the value of high-end housing and that there will be a ‘trickledown’ effect that will reduce housing values across the country, but I do not think that this will be the case.” — GARDNER
PROPERTY TAX DEDUCTION CAP: IMPACT BY COUNTY HOMES WITH PROPERTY TAX $10,000+ PCT OF TOTAL HOMES -8.7% 73.4%
I do not see that these changes will have any substantial effect at a
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JANUARY 2018 | ATTOM DATA SOLUTIONS
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