Tax Bill Raises Concerns About Homeownership; Most Will Change Buying Or Selling Plans

Nearly one in three say they will buy a home “faster”

Majority support doubling the standard deduction and the increase in child tax credits

Santa Clara, CA – Dec. 21, 2017 (PRNewswire) A new nationwide consumer survey from realtor.com® shows that the Tax Cuts and Jobs Act passed by Congress on Dec. 20 is raising anxiety about owning a home, with a majority of respondents reporting that the tax bill makes them either “concerned” (36.2 percent) or “very concerned” (17.2 percent) about being a homeowner. In contrast, less than a quarter of respondents said that the bill makes them feel “positive” (15.0 percent) or “very positive” (7.2 percent) about homeownership. Only 22.9 percent said that the tax bill would not change their plans to purchase, while 57.1 percent said that the bill would not change their plans to sell.

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The Tax Cuts and Jobs Act will provide many people with higher after-tax incomes, which is expected to put upward pressure on home prices and mortgage rates. It caps the mortgage interest rate deduction at $750,000 and increases the standard deduction, which will eliminate the tax benefits of homeownership for many people and could decrease sales and home prices in expensive areas.

“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,” said realtor.com® Senior Economist Joseph Kirchner, Ph.D. “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 up even higher than they are already. And changes in the deductibility of mortgage interest and state and local taxes could cause challenges for many homeowners.”

The findings are part of an online survey of 2,324 randomly selected online respondents across the U.S. conducted on behalf of realtor.com® between Dec. 18 and 19.

Survey Highlights
Most and least favored aspects of the bill

  • Nearly doubling the standard deduction and increasing child tax credits: 26.1 percent positive, 25.4 percent very positive
  • Elimination of the mortgage interest rate deduction on second homes: 12.4 percent very positive, 18.5 percent positive
  • Elimination of the deduction for personal casualty losses: 36.4 percent very negative, 20.1 percent negative
  • The bill will increase the deficit by $1.5 trillion over 10 years, according to the Joint Committee on Taxation: 37.6 percent very negative, 13.8 percent negative

Expected impact of implementation
“How will the tax bill likely influence your home sale this year?”

  • No impact: 57.1 percent
  • I will sell faster: 13.9 percent
  • Other: 11.4 percent
  • I will sell slower: 10.0 percent
  • I will postpone my home sale: 7.6 percent

“What likely impact will the tax bill have on your plans to buy a home this year?”

  • I will buy faster: 29.2 percent
  • No impact: 22.9 percent
  • I will buy slower: 18.5 percent
  • I will purchase a less expensive home: 14.2 percent
  • I will postpone my plans to buy this year: 12.0 percent
  • I will purchase in a different location: 2.3 percent
  • Other: .9 percent

About realtor.com®
Realtor.com® is the trusted resource for home buyers, sellers and dreamers, offering the most comprehensive source of for-sale properties, among competing national sites, and the information, tools and professional expertise to help people move confidently through every step of their home journey. It pioneered the world of digital real estate 20 years ago, and today helps make all things home simple, efficient and enjoyable. Realtor.com® is operated by News Corp [NASDAQ: NWS, NWSA] [ASX: NWS, NWSLV] subsidiary Move, Inc. under a perpetual license from the National Association of REALTORS®. For more information, visit realtor.com®.

Media Contact:
Realtor.com®
Lexie Puckett Holbert
lexie.puckett@move.com

Final GOP tax reform bill punishes homeowners and weakens homeownership, C.A.R. says

Los Angelese, CA – Dec. 15, 2017 (PRNewswire-USNewswire) The CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.) issued the following statement in response to the final Tax Cuts and Jobs Act tax reform bill released today:

“The final tax reform bill released punishes homeowners and weakens homeownership, and in fact, it looks at homeowners and the housing market as nothing more than a piggy bank,” said C.A.R. President Steve White. “Congress is touting this as a tax cut for middle-class families, but the reality is that thousands of California middle-class homeowners will be the first ones to face tax increases.”

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“California is a donor state, meaning for every dollar we send to the federal government, they send back less than a dollar. California homeowners and consumers deserve better. With homeownership already a stretch, or out of reach altogether for so many Californians, now is not the time to make owning a home more difficult.”

“C.A.R. will continue to advocate for homeownership and urge Congress to vote No on legislation that negatively impacts California homeowners and lowers corporate taxes on the backs of families wanting to buy a home,” said White.

Leading the way… ® in California real estate for more than 110 years, the CALIFORNIA ASSOCIATION OF REALTORS® (www.car.org) is one of the largest state trade organizations in the United States, with more than 190,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles.

Infographic: Homeowners Say Changing Homeownership’s Tax Incentives Restricts Mobility, Causes Financial Strain

Washington, D.C. – December 12, 2017 (nar.realtor) An overwhelming majority of homeowners would take advantage of the mortgage interest deduction and state and local property tax deductions if they were to purchase a new home, and a notable share said that the proposed changes to these tax incentives would affect their budget and desire to move in the future.

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This is according to new data from the National Association of Realtors®’ fourth quarter Housing Opportunities and Market Experience (HOME) survey. The findings clearly indicate that the proposed changes in the current House and Senate tax reform bills undercut the incentive of owning a home and would have a detrimental effect on many homeowners’ financial situation and future desire to move:

  • 85 percent would deduct both mortgage interest and property taxes if they bought a new home

If changes to these deductions were made:

  • 48 percent would experience financial strain
  • 30 percent would be reluctant to move

“Homeownership is an aspirational goal for millions of Americans, but getting there isn’t always easy. Middle-class families count on tax incentives like the mortgage interest deduction and the state and local tax deduction to make homeownership a more affordable prospect,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Realtors ® will continue to advocate for these and other important provisions as the tax reform debate continues.”

Real Estate Infographic

The remaining findings from NAR’s fourth quarter HOME survey will be released Monday, Dec.18.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Media Contact:

Adam DeSanctis
(202) 383-1178
Email

Experts Highlight Mix of Challenges, Bright Spots for Homeownership at Realtors®, S&P Global Joint Event

Washington, D.C. – December 6, 2017 (nar.realtor) While America’s homeownership rate continues to hover around a 50-year low, experts gathered at the National Association of Realtors® Washington, D.C. location today said there is a clear path to improving the landscape for homeownership.

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Senator Heidi Heitkamp (D-N.D.) opened the event with a full-throated defense of the role that homeownership plays in American society.

“Homeownership is not a loophole,” said Heitkamp. “When there is no hope for owning real property, we are taking a huge step backwards for the future of our country.”

Senator Heitkamp specifically singled out tax reform legislation passed in the U.S. Senate, calling the bill a “systematic dismantling” of the incentive structure for homeownership. Heitkamp also spoke to the need to reform the government-sponsored enterprises, as well as the importance of protecting and preserving the 30-year fixed rate mortgage.

Chairman Jeb Hensarling (R-Texas) of the House Financial Services Committee also addressed attendees, offering reminders of why sustainable homeownership is so important to protecting both taxpayers and the overall economy.

Hensarling cited what he called the “unsustainable housing finance rollercoaster” that caused the Great Recession. He said this “lost decade” represented 10 years of lost economic growth and should guide policymakers looking to improve financial and mortgage systems in the years ahead.

“The lesson is clear: Housing unsustainability doesn’t just create unaffordability,” he said. “It can create economic catastrophe.”

Nobel Prize winning economist Dr. Robert Shiller echoed those reminders as he offered the event’s keynote address. Citing data on public perceptions of home price appreciation, Dr. Shiller noted the measurable rise in exuberance for real estate investment that led up to the 2007 housing crash.

“People saw that they had this opportunity of a lifetime to borrow at 6 percent and invest at 12 percent,” Shiller said. “But where did this expectation come from?”

Dr. Shiller also cited home sales prices as an important market indicator. He noted that when homes are appreciating they tend to sell above the asking price more often than when home values are in decline. But even more interestingly, Shiller said that homes selling above the asking price is a recent phenomenon that offers clues about exuberance in the market.

In addition, Dr. Shiller said that general impressions about the inherent risk of buying a home can indicate the presence of a bubble. He shared data showing that over the past decade, the public sentiment about the inherent risks of buying a home peaked in 2006. Separately, however, Shiller noted the return of what he called the “buyer’s panic,” where potential buyers fear that they will be priced out if they don’t purchase a home soon.

Shiller said he shared this information as a reminder of the complexity of overall housing markets.

“It’s not just interest rates and tax law that drive prices in speculative markets,” Shiller said.

Following Dr. Shiller’s remarks, Politico’s financial reporter Lorraine Woellert moderated a panel of experts. These included Dr. Beth Ann Bovino, chief U.S. economist at S&P Global Ratings; Jessica Lautz, managing director of survey research and communication at NAR; and Layla Zaidane, chief operating officer of the Millennial Action Project. The panel spoke to ongoing concerns that student debt is contributing to the challenges facing young homebuyers.

Asked if the low rates of homeownership among young adults will solve itself, Bovino said “eventually, time will start to soften the impact of those high student loans. Jobs are coming around, wages are picking up.” But for now, the experts agreed that the issue is having a real impact on the market.

“When we look at the spectrum of those who have student loan debt, only 55 percent of them are making their payments on time,” Lautz said. For many of these individuals, she said, homeownership is simply not an option. But even among those who are currently making their payments, Lautz said homeownership is still largely out of reach.

“Among millennial student loan borrowers who are current on their payments, 80 percent are not homeowners,” said Lautz. When they are buying, she added, they tend to buy in the suburbs where homes are most affordable.

In a separate panel, Dr. Lawrence Yun of NAR, Alex Nowrasteh of the Cato Institute, and Boyd Campbell of Century 21 addressed affordability concerns in a discussion on supply and demand issues facing the current housing market.

Noting a 4-month supply of homes nationwide, Yun said, “Prices have risen roughly 40 percent in the past five years, while people’s income has risen at a much slower rate. This rise in prices forces an affordability concern.”

Yun said that puts homeownership out of reach for many buyers, and added that this isn’t simply a real estate concern, but also a labor market concern as college-educated workers leave areas where the job market is strong but home prices are relatively high.

Earlier this year, at the 2017 Realtors® Conference & Expo, Yun forecasted that single-family housing starts will jump 9.4 percent to 950,000 in 2018, well below the 50-year average of around 1.2 million starts.

“Prospective homebuyers face headwinds from the market, in the halls of Congress and in their own family’s budgets,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “We can’t solve them all, but we know more can be done to smooth the way for creditworthy borrowers who want to own a home. I’m pleased we could assemble such a diverse pool of experts to offer their insights as we chart a path to improving America’s homeownership landscape.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

S&P Global is a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide. The Company’s divisions include S&P Global Ratings, S&P Global Market Intelligence, S&P Dow Jones Indices and S&P Global Platts. S&P Global has approximately 20,000 employees in 31 countries. For more information, visit www.spglobal.com (link is external).

Media Contact:

Jon Boughtin
(202) 383-1193
Email

Trulia: 2018 May See Cooling Of Pricey Coastal Markets And Continued Rise In Homeownership Rate Despite For-Sale Inventory Shortage

Trulia Identifies 10 Housing Markets to Watch: Grand Rapids, Mich., Nashville, Tenn., Raleigh, N.C., El Paso, Texas, San Antonio, Texas, Fort Worth, Texas, Austin, Texas, Columbus, Ohio, Madison, Wis. and Cincinnati, Ohio

San Francisco – Dec. 7, 2017 (PRNewswire) Trulia®, a home and neighborhood resource for homebuyers and renters, today released its 2018 Housing Outlook Report. Heading into the new year, Trulia Chief Economist Ralph McLaughlin shares his predictions for the housing market in 2018:

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Tax Plans May Help Cool Expensive Coastal Markets: As Washington nears a tax overhaul that shifts burdens for homeowners, the luxury market and housing markets in expensive, high-tax states in the Pacific West and Northeast might see cooling. This could include slowing home price growth, new construction and existing home sales.

Homeownership Rate Will Continue to Climb: 2017 saw the first significant increase in the homeownership rate in over 10 years. Meanwhile, the number of owner-occupied households grew faster than renter households for three consecutive quarters—a first in 12 years as the number of renter households fell for two consecutive quarters. As Gen Xers transition back from renting to owning and more millennials become homeowners, the homeownership rate will continue to increase as it has trended in 2017, albeit slowly.

Trulia’s Top 10 Housing Markets Poised for Growth
Trulia identified 10 housing markets to watch in 2018 among the 100 biggest markets, based on five key metrics: strong job growth over the past year, low vacancy rates, high starter-home affordability, more inbound than outbound home searches on Trulia and a large share of people under age 35 in the population as a measure of prospective first-time homebuyers.

1. Grand Rapids, Mich.
2. Nashville, Tenn.
3. Raleigh, N.C.
4. El Paso, Texas
5. San Antonio, Texas
6. Fort Worth, Texas
7. Austin, Texas
8. Columbus, Ohio
9. Madison, Wis.
10. Cincinnati, Ohio

Key Findings from Trulia’s American Dream Survey
The report also includes findings from Trulia’s annual survey of American sentiment on homeownership in the year ahead, which was conducted online by Harris Poll of more than 2,000 Americans age 18 and older.

Rising Home Prices Becoming Bigger Obstacle, Many Plan to Buy After 2020
One in four Americans (25%) believe buying a home in 2018 will be better than in 2017—the same as those who say it will be worse (also 25% of Americans). One possible reason for the split sentiment: 40% of American renters who desire to buy a home say rising home prices is their biggest obstacle to homeownership—the highest level reported since 2013 when only 22% said the same. Perhaps as a result, only 10% of Americans plan to buy a home as their primary residence in the next 12 months while 41% plan to wait at least two years.

Rising Optimism for Home Selling Unlikely to Ease Tight Inventory Immediately
Nearly one in three Americans (31%) think 2018 will be a better year for selling a home than 2017, versus 14% who think it will be worse—a 17-percentage point differential, which is the highest differential since 2014 (20%). This spells good news for the current inventory crunch, but relief may not come for a few years as only 6% of homeowners plan to sell their home in 2018.

73% of Millennials Aspire to be Homeowners, But Saving Money Remains Key Obstacle
Today, 73% of Americans aged 18-34 say homeownership is part of their personal American Dream; however, this majority is below 2015’s level of 80% expressing this same sentiment. Yet for many millennials, their homebuying plans aren’t happening soon: 65% who plan to buy a home one day said they don’t plan to do so until at least 2020. Why are they waiting? Perhaps lack of funds—saving for a down payment is one of the greatest obstacles to homeownership (66%), along with rising home prices (47%) and qualifying for a mortgage (37%) for millennial renters who want to buy a home.

Natural Disasters Causing Homeowners, Homebuyers to Rethink Where They Live
After 2017’s array of floods, hurricanes, wildfires, and other natural disasters, 39% of Americans say they are more concerned about the potential threat of natural disasters affecting their homes, with a higher proportion of those in the hurricane- and flood-ravaged South expressing concerns (43%). Only 5% of Americans are less concerned about this potential threat. More tellingly, a majority of Americans said the potential for the aforementioned natural disasters – floods (72%), hurricanes (61%) and wildfires (58%) – would influence their home searches if they were looking to purchase a home.

Quotes from Trulia’s Chief Economist Ralph McLaughlin:

“Homeownership will continue its comeback story in 2018 as Gen Xers who were hard-hit during the Great Recession become homeowners again, and as more millennials buy homes for the first time. But homebuyers won’t be without challenges as they’ll still face low inventory, slow wage growth and expensive starter homes. For millennials, they have the added hurdle of saving enough money to make a down payment and make competitive offers amid rising home prices.”

“Amid 2017’s slew of natural disasters, future homebuyers may rethink where they live. But the desire to become a homeowner remains strong enough so these concerns are only likely to deter demand in the most vulnerable of locales.”

Survey Methodology
This survey was conducted online within the United States between November 9th and 13th, 2017 among 2,188 adults (aged 18 and older) by Harris Poll on behalf of Trulia. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology for this survey or previous surveys, including weighting variables and subgroup sample sizes, please contact pr@trulia.com.

About Trulia
Trulia®is a vibrant home shopping marketplace, focused on giving homebuyers, sellers, and renters the information they need to make better decisions. On mobile and the Web, Trulia provides house hunters with insights and unique information about properties, neighborhoods, and real estate agents. Additionally, Trulia offers data and information about schools, crimes, commute times, and the real estate market.

Launched in 2005, Trulia is based in San Francisco and is owned and operated by Zillow Group, Inc. (NASDAQ: Z and ZG).

Trulia is a registered trademark of Trulia, LLC.

MEDIA CONTACT:

Debbie Baratz
pr@trulia.com
(415) 757-2299