U.S. markets open in 4 hours 25 minutes
  • S&P Futures

    +13.75 (+0.31%)
  • Dow Futures

    +127.00 (+0.37%)
  • Nasdaq Futures

    +32.50 (+0.22%)
  • Russell 2000 Futures

    +12.90 (+0.58%)
  • Crude Oil

    +0.30 (+0.42%)
  • Gold

    -7.90 (-0.43%)
  • Silver

    -0.14 (-0.53%)

    +0.0011 (+0.10%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • Vix

    +0.60 (+3.29%)

    +0.0028 (+0.20%)

    -0.1590 (-0.15%)

    -1,020.20 (-2.58%)
  • CMC Crypto 200

    -26.60 (-2.77%)
  • FTSE 100

    +22.50 (+0.32%)
  • Nikkei 225

    -139.19 (-0.50%)

Here's where home prices could take the biggest hit thanks to tax reform

home for sale
home for sale

AP Photo/Elise Amendola


  • Both the House and the Senate voted to pass the final GOP tax bill and President Trump signed the bill into law on December 22.

  • The tax bill is set to disproportionately affect homeowners in affluent parts of the US.

  • Several housing markets in the Northeast will see home prices fall behind typical growth as a result of tax reform.

Two days after the the Senate and House passed final GOP tax bill, President Trump signed the bill into lawbefore departing the White House for his Mar-a-Lago estate in Palm Beach, Florida, on December 22.

Under tax reform, national home prices are expected to take a hit, but the impact will likely be greater on markets with higher-priced homes.

According to new data from Moody's Analytics, several counties in New Jersey and New York — predominately blue states with rich homeowners — are the biggest losers.

The tax bill presents a few changes for homeowners: The mortgage interest deduction cap will fall to $750,000, the property tax deduction will drop to $10,000, and the standard deduction for all taxpayers will increase to $12,000 for single filers and $24,000 for joint filers.

That means it may no longer be better for some households to itemize the mortgage interest deduction, since it would be lower than their standard deduction.

The tax bill also explodes the deficit by $1.5 trillion, resulting in higher mortgage rates, and ultimately weakening housing demand, said Mark Zandi, the chief economist at Moody's Analytics.

"Considering all of this, the hit to national house prices is estimated to be near 4% at the peak of their impact in summer 2019," Zandi said. "That is, national house prices will be approximately 4% lower than they would have been if there were no tax legislation."

Below are the 25 counties expected to lose the biggest percentage of potential value increase once tax reform is enacted, according to research from Moody's Analytics. Only six are located outside of New Jersey or New York.

BI Graphics_How home prices could change after tax reform
BI Graphics_How home prices could change after tax reform

Samantha Lee/Business Insider


For more news videos visit Yahoo View.

NOW WATCH: Here's what Trump's tax plan means for people at every income level from $20,000 to $269,000 a year

See Also:

SEE ALSO: The 11 worst cities for homeowners if the GOP tax plan passes

DON'T MISS: In one of America's 'most miserable' cities, home prices have surged 92% in the last 5 years