Zillow estimates that many homeowners and renters would use a portion of their potential tax savings from the Tax Cuts and Jobs Act (TCJA) on housing.
Economic research director Aaron Terrazas writes that Americans will spend an extra $24.7 billion on home renovations in 2018, per Zillow Housing Aspirations Report (ZHAR) data. Based on survey data from the report, renters said they would save an average of 11 cents of every dollar in potential tax savings and put it toward either renting or buying a home. Homeowners said they would put aside 15 cents on the dollar toward home renovation projects.
The net effect of the TCJA was to reduce most Americans’ federal tax liability and increase their after-tax income, in large part by lowering marginal tax rates and increasing the standard deduction. Many are likely to spend at least some of these gains, however small, on housing – despite new limits on tax benefits historically aimed at homeowners, including the mortgage interest deduction and deductions for state and local property taxes.
Advertisement
Related Stories
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Labor + Trade Relations
Who's Earning What in Construction
Workers in construction management roles may earn a higher median wage, but on average, lower-paid occupations have experienced somewhat faster wage growth
Build to Rent
Build-to-Rent Is Booming, Particularly in These Metros
A recent report finds that the Phoenix metro leads with more than 4,000 build-to-rent units completed in 2023, and Texas is the leading state for build-to-rent development
