Housing prices continue to climb across the U.S., even in areas hit hardest by the new limitation on state and local tax deductions, Jim Tankersley of The New York Times reports.
Many analysts thought the new deduction rules, which limit state and local tax deductions to $10,000 per household, would depress home values in high-tax states like New Jersey and Connecticut, but the data so far doesn’t show any loss in value.
Lawrence Yun, the chief economist for the National Association of Realtors, said earlier this year, “We thought that there would be some impact, but the market is saying, so far, there is not an impact.”
Researchers at Zillow did find a slight slowing in the rate of increase for housing values in pricey areas of high-tax states. The growth in home values slowed by 0.6 percent in the top 10 percent of areas that claim the SALT deduction, Zillow found, compared to a 0.3 percent slowdown at the median and no slowdown in the bottom 10 percent.
While the data doesn’t point to any net losses, residents in those areas are “giving up hypothetical money that otherwise they would have had,” said Aaron Terrazas, senior economist at Zillow.