Buying a home might become an expensive proposition after the new tax bill, according to a nationwide survey conducted by Realtor.com, a website that offers information and resources on buying and selling properties.
The survey, which was released on Thursday, found that 29.2 percent of potential homebuyers said they would buy a home faster after the Tax Cuts and Jobs Act, citing concerns about home prices possibly increasing. Only around 18.5 percent of respondents said that they would buy slower, and 12 percent said they would postpone purchasing a home.
The survey reported that the tax bill made 36.2 percent of the respondents concerned about being a homeowner. In contrast, only 15 percent said that the bill made them feel positive. Around 22.9 percent respondents said that the tax bill would not change their plans to purchase a home, while 57.1 percent who said that the bill would not change their plans to sell.
“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,” Joseph Kirchner, Senior Economist at Realtor.com, said.
Realtor.com’s report also suggests the tax bill is expected to provide many people with higher after-tax incomes, which is further expected to put upward pressure on home prices and mortgage rates. The bill caps the mortgage interest rate deduction at $750,000 and increases the standard deduction, which will alter the tax benefits of homeownership for some and could decrease sales and home prices in expensive areas.
“Some house hunters—particularly wealthy buyers—will see an increase in after-tax income making an already tough housing market even more competitive. This increased demand could drive prices even higher than they are already while changes in the deductibility of mortgage interest and state and local taxes could cause challenges for many homeowners,” Kirchner said.
Around 12.4 percent respondents in the survey were positive and 18.5 percent said they were very positive about the elimination of the mortgage interest rate deduction on second homes, the survey noted.