Tax Law Unlikely to Impact Home Prices

Posted To: MND NewsWire

Freddie Mac looked at the possible effects of the Tax Cuts and Jobs Act of 2017 in an earlier edition of its Outlook economic forecast. This month it takes that analysis granular - right down to two families, the Smiths and the Johnsons, both in the market to buy a house. The Smiths are a median income family living in Mississippi while the Johnsons are high income earners living in New Jersey. Each family has one kid and each plan to spend four times their income on a home. The Smith's would see little impact from homeownership under the new tax law. Their taxable income would decrease from $17,150 in 2017 to $16,000 in 2018 as the much larger standard deduction makes up for the elimination of or caps on many deductions that might earlier been itemized. The Johnson's on the other hand, see...(read more)

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