With the Republican party (and the S&P 500 apparently) convinced they have the votes required to pass their tax reform legislation this week, the folks at ATTOM Data Solutions took a look at which housing markets will be most impacted by new limitations on mortgage interest and property tax deductions.
First, on the reduction of the mortgage interest deduction to $750,000 from $1,000,000, ATTOM found that nearly 99,000 single family home and condo purchases so far in 2017 involved a mortgage higher than $750,000. And while that represents a small 3.9% of all home purchase loans underwritten so far in the year, per the interactive map below, those 99,000 loans are concentrated in a handful of liberal counties in the Northeast, California and Southern Florida.
Among 2,022 counties included in this analysis and at least 50 home purchase loans so far in 2017, those with the highest share of loan originations above $750,000 were New York County (Manhattan), New York (63.8 percent); San Francisco County, California (58.0 percent); Nantucket County, Massachusetts (57.3 percent); San Mateo County, California (55.2 percent); and Marin County, California (50.o percent). Among those same 2,022 counties, those with the highest number of purchase home loan originations above $750,000 so far in 2017 were Los Angeles County, California (9,197); Santa Clara County, California (5,543); Orange County, California (4,450); Maricopa County, Arizona (3,723); and King County, Washington (3,715).
Meanwhile, the second proposed change in the GOP tax plan involves a cap on the deductibility of property taxes at $10,000. And, much like the impact of mortgage interest above, the map of who's most impacted looks eerily similar to the 2016 electoral college map.
The county-level heat map below shows the share of single family homes and condos in each county where the most recent property tax bill available was more than $10,000.
Among the 1,731 counties analyzed, those with the highest share of homes with property taxes above $10,000 were Westchester County, New York (73.4 percent); Luna County, New Mexico (68.7 percent); Rockland County, New York (60.0 percent); Mathews County, Virginia (54.4 percent); and New York County (Manhattan), New York (52.5 percent). Among those same counties those with the highest volume of homes with property taxes above $10,000 were Nassau County (Long Island), New York (176,946); Los Angeles County, California (165,078); Suffolk County (Long Island), New York (155,592); Bergen County, New Jersey (126,096); and Harris County (Houston), Texas (125,792).
Of course, this all presumes that Senator John McCain doesn't have another sudden change of heart when it comes time to actually cast his vote.