In the News Presented by Prairie Title
November 13,
2017
The Tax Plan Cometh
We have to address the elephant in the room: tax code changes and their effect on housing in 2018 and beyond. First, NAR reports that next year could see an increase in existing home sales due to an improving economy, job growth and rising confidence; however, it will be limited by continued supply shortages. NAR forecasts home sales will grow to 5.67 million in 2018, the highest point since 2006.
But, and this is a big but, NAR also predicts that if the House tax bill or a similar version becomes law, it could act as a disincentive to homeownership and hold back strong sales activity.
NAR
explains that the House tax bill could affect home sales and even home prices
in 2018 and beyond, claiming that in its current form, the bill is a direct tax
hike on homeowners. NAR’s analysis of the bill estimates
it would cause home values to drop 10% and raise taxes on middle-income earners
by an average of $815
On
the bright side, Senate Republicans last week weighed in with a tax plan that
would preserve the mortgage interest deduction.
We’ll
see what happens over the next few months. I am very skeptical that slashing the mortgage
interest deduction will have anything but a negative effect on the housing
market. Let’s hope that doesn’t happen. I encourage all you to contact your
representative in Congress and push to preserve the deduction.
Automation will fix
TRID? The
CFPB has published its final TRID amendments which, as expected, did nothing to
fix the issues with fee disclosures (particularly title insurance) on the
Closing Disclosure form. Beyond that, we don’t know what the future holds for
CFPB as the court case challenging its constitutionality (PHH vs. CFPB) continues,
the Republican Congress seems determined to de-fang if not eliminate it and
Director Cordray’s term expires in June.
There
is some bipartisan movement on the issue in Congress that is worth
watching, but a tantalizing question is whether technology will help cure the
problems in the long run regardless of what happens in Washington. A technology
expert recently made just that case in Scotsman Guide. On related note, NAR recently
published a good explanation of blockchain technology and its coming impact
on the real estate market.
The scamming crisis. Hackers continue to
scam homebuyers out of millions and it’s getting worse. I urge you to read this
excellent summary of the situation by
real estate writer Ken Harney, and pass the warning along to your staff and
customers.
What’s your point of view? Call or email me, or write a comment here. Let’s keep the conversation going.
