If a U.S. tax reform measure targeting the popular mortgage interest deduction is adopted, values of homes could drop 10 percent on average nationally, Lawrence Yun told 20,000 real estate agents gathered for the National Association of Realtors conference last week.
Home owners would be leery of trading up to bigger, more expensive homes, because the cap would fall to $500,000 from the current $1 million, while renters would lose a tax benefit that could be a key incentive in the decision to buy, said Yun, chief economist of the real estate brokers group.
“This will greatly disincentivize buying homes,” he said. “There will steadily be fewer home buyers over time.”
The NAR is launching an offensive against the tax bill introduced last week
Early seasonal snow and questions swirling around the tax plan unveiled last week by House Republicans could make the usual seasonal slowdown more pronounced, say industry leaders from Northwest Multiple Listing Service. For October, however, key indicators trended upwards.
Pending sales rose nearly 8 percent from a year ago, closed sales were up 5.2 percent, and prices jumped about 8.2 percent, with 14 counties reporting double-digit gains. Even the number of new listings improved on the year-ago total.
Northwest MLS figures for the 23 counties it serves show members added 8,466 new listings to inventory during October, outgaining the year-ago total of 7,575 by 11.8 percent. Buyers outnumbered new listings, with 10,586 of them having their
Aspiring homeowners in the Seattle region, dealing with the hottest housing market in the country, would be hit especially hard by the new GOP tax plan unveiled Thursday. The proposal would cap the federal mortgage-interest deduction at $500,000 for new-home purchases, down from the limit of $1 million. Basically, new homeowners would only be able to deduct the interest on the first $500,000 of their mortgage.
This won’t impact most Americans because they don’t own homes that expensive. But it’s a big deal locally, where the median single-family house selling today is worth $725,000 in Seattle and $855,000 on the Eastside. Even with a regular down payment, lots of buyers here take out a mortgage that’s over half-a-million dollars, and they would lose
There’s a mismatch in the housing market. Demand is rising, yet homebuilders don’t have the capacity to create the supply. They haven’t banked as much land, they haven’t filed the permits and they’ve become increasingly short of labor—one possible byproduct of the Trump administration’s crackdown on illegal immigrants.
In fact, the nation is probably short about 700,000 homes on an annual basis. That explains why new home sales have been somewhat disappointing.
It also explains why sellers in many markets are now in prime position. According to Realtor.com, in December and January the supply of existing homes was 3.6 months, something that hadn’t happened since January 2005. In Seattle, for instance, the average time a house stays on the market
