Under the new tax reform bill, national home prices are expected to drop. New data from Moody's Analytics show that several counties in blue states New Jersey and New York with high-end housing markets will be hit hardest.
A few changes for homeowners under the bill include the mortgage interest deduction cap lowered to $750,000, the property tax deduction dropped to $10,000, and the standard deduction for all taxpayers increased to $12,000 for single filers and $24,000 for joint filers, per Business Insider.
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, national house prices will be approximately 4 percent lower than they would have been if there were no tax legislation," Zandi said.
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