Homebuilder Stocks Tumble in the Wake of Tax Bill Passage

by Isaac Benmergui, Esq on December 8, 2017

Homebuilder Stocks Tumble in the Wake of Tax Bill PassageHomebuilder stocks tumbled the morning after news broke that the new Tax Cuts and Jobs Act contained provisions that would limit the mortgage interest deduction.

The new tax law would limit deductions for mortgage interest to $500,000 and also only give deductions for property taxes up to $10,000. The general consensus among housing industry analysts is that the new tax law will put even more pressure on the market for home below $500k. This would have the biggest impact in pricey areas where affordable homes are already in short supply.

After the housing crisis, the builders who survived shifted their focus from mass producing mid-range homes to luxury properties that occupy the same amount of space but bring in a higher price per square foot with custom touches and high-end finishes. In places like Florida, that’s lead to a shortage of homes under $500k and under $350k, the two price points where most entry-level buyers come from.

With Boomers being unwilling to downsize and Millennials finally wanting to settle down and buy their first home, even more pressure has been put on these markets. Now the tax bill threatens to slow down the market for homes above $500k, since mortgage interest above this price point will no longer be deductible. This reduces affordability even for those who are looking at these price points, and may discourage those who can afford to take on that level of debt at a time when sales were picking up in these markets.

Call Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate and Civil Litigation cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

Previous post:

Next post: