New Report Looks At How Potential Homebuyers Will Respond To Tax Reform

 

SAN FRANCISCO — The recently passed Tax Cuts and Jobs Act of 2017 has made significant changes to longstanding tax benefits for homeowners. In a new report released today, Apartment List surveyed potential homebuyers across the country to see how tax reform has impacted their plans for homeownership.

Here are some highlights you might be interested in:

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  • Nationally, 57% of potential homebuyers say that tax reform has had no impact on their homeownership plans; 26% say that the changes have had a negative impacted on their plans, while 18% report a positive impact.
  • 38% of Democrats report a negative impact to their homeownership plans, compared to just 10% of Republicans. Partisanship persists even among respondents who we would expect to be similarly impacted.
  • Overall, 26% of potential buyers say that they plan to delay purchase in response to the changes. On the other hand, 13% say that they expect to have a lower tax bill and plan to use those savings to achieve homeownership sooner.

Despite a significant reduction to longstanding tax benefits for homeowners, a majority of respondents to our survey report no changes to their home buying plans. It is important to note that the tax code changes do not have a uniform impact, and some markets will likely be affected more than others. In harder hit areas with high home values and property tax rates, sentiment skews more negative, and twice as many respondents report that they now plan to move out of state. While unlikely to be the decisive factor for most potential homebuyers, the recent changes to the tax code amount to a shifting of incentives that make homeownership less attractive, which could result in softening demand, particularly in the hardest hit markets.

The full report is available here.

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