Considering Purchasing a Home? Should You Wait?

According to the analysis of industry leading financial analysts, maybe you should. They speculate that the changes in tax reform will lead to lower home prices as real estate investments become less attractive due to loss of tax deductions. The real estate tax deductions up for limitation or complete elimination include the real estate property tax and the mortgage interest deduction which are both very significant in influencing investments in the real estate sector.  Two questions come to mind when considering the implication.  First, will Congress and the House of Representatives make changes which will minimize the impact on the real estate sector? Second, if not, just how significant will the blow to the housing market be?  Some analysts are speculating a drop in housing of no more than 10%.  Other analysts are speculating between 10% to 30%.  These analysts have gone as far as speculating that we can possibly relive the stock market recession which resulted from the housing crash of 2008 due to severely depressed real estate investments as a result of tax reform measures.  However, other analysts do not agree with this dire view.  They predict that the stock market overall will actually strengthen as investors shift their investments into stocks rather than real estate.  If you recall, the last housing market contraction resulted in extremely tightened lending which impacted businesses and individuals alike, and severely limited the stock market’s ability to rebound from the recession.  So, we wait to see what the final uniformed bill brings to bear and how the housing market will be affected. 

 

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