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In his panel at EPIQ 2018, CoreLogic Chief Economist Dr. Frank Nothaft noted that the tax cuts enacted through the Tax Cuts and Jobs Act have created more disposable income, which may incline buyers toward a “higher quality and quantity of housing.” However, the higher standard deduction and lower property tax cap remove many of the after-tax benefits of homeownership.

In an effort to determine how this positive “Income Effect” has interacted with the negative “Price Effect” on the nation’s housing economy, CoreLogic has examined the changes in housing market conditions across the 500 zip codes with the highest housing costs, average mortgage loans and property tax payments in the nation. The firm compared market conditions over the six months before the legislation took effect to the first six months after, then did the same for the previous four years as a yardstick.

By analyzing all of this data, Nothaft saw that the patterns remain fairly consistent, with no large drop in home prices, as some analysts have feared. Nothaft followed up with similar studies on other areas of the market to come to the same overall conclusion: “So far, we don’t see any effect of the legislation in terms of prices, home sales and inventory on the housing market.”

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