Moody’s Analytics chief economist Mark Zandi says U.S. home prices are likely to be 4 percent lower than what they could have been without the tax changes that took effect in 2018. His remarks came in an interview with the Wharton School of Business.
In the podcast, Zandi told Wharton’s Susan Wachter that the combined effects of a cap of $10,000 on federal deductions for state and local real estate and income taxes, and the elimination of some mortgage interest deductions are responsible for lower home valuations.
The growth in house prices nationwide has fallen to about 3% from levels of 6%-7% before the tax bill’s provisions took effect, said Zandi. The impacts will be most significant in places where home prices and real estate taxes have been high, such as the Northeast Corridor, particularly around New York, the Philadelphia area, Washington, D.C., the Chicago area and California, he said.
To learn more about the drop in home prices, click on the image above.