Photo: Robert Clark
Following the passage of the Tax Cuts and Jobs Act yesterday, some Americans say they aren’t waiting to see how the housing market fares under the new law.
In fact, many homebuyers are sellers are now moving up their home buying or selling plans, according to the results of an online survey conducted by realtor.com.
The vast majority of respondents claimed the tax bill makes them either “concerned” (36.2 percent) or “very concerned” (17.2 percent) about homeownership.
This is compared to only 15 percent of respondents reporting that the bill made them feel “positive” about homeownership. A very scant 7 percent claimed the new bill made them feel “very positive” about homeownership.
The online survey of 2,324 randomly selected respondents was conducted by realtor.com on December 18th and 19th — days before the bill was signed into law.
“The bill will have a significant impact on the housing market and overall economy, so it makes sense that people are wondering what it means to them,” realtor.com Senior Economist Joseph Kirchner says in a digital press release.
Yet despite their lackluster reception of the new law, none of the surveyed prospective homebuyers said they would postpone their plans in 2018. However, just over 29 percent of respondents reported that they would “fast-track” their plans, while 18.5 percent said they would “take more time” if the bill passed. Nearly 23 percent had no plans to change their shopping pace.
Meantime, over 57.1 percent of homeowners said the passage of the bill would not alter their plans to sell. However a small number — just under 14 percent of respondents — felt that their home would sell quicker thanks to the new law. A mere 7.6 percent of sellers said they would postpone selling in 2018.
The Tax Cuts and Job Act has some real estate experts concerned that some buyers may actually be discouraged since it lowers the cap on mortgages eligible for interest deduction from $1 million to $750,000. This cap is likely to affect buyers in pricey markets like California and New York.
Another potentially negative side-effect of the new law for the housing market is that it might increase competition in an already fiercely competitive marketplace.
“Some house hunters — particularly wealthy buyers — will see an increase in after-tax income, making an already tough housing market even more competitive," Kirchner says in the release.
Click here to read the entire report.