Republicans are hoping to pass newly proposed tax reforms this month. If passed, homeowners in expensive areas may be negatively impacted while middle-income homeowners in the South and Midwest with more affordable homes could come out on top.
"Homeowners, and even some renters, in the most expensive markets will be hit hardest by the tax reform plan initially," says Realtor.com Chief Economist Danielle Hale. "But as many of the deduction caps won't rise with inflation, homeowners across the country will feel the pinch of these changes."
Now, only about a fifth of American tax filers (21.5 percent) claimed the mortgage interest deduction, netting an average $8,612 in tax deductions in 2015, according to the Pew Charitable Trusts. And only about 5.4 percent of all of the mortgages made this year were for more than $500,000, according to real estate information firm Attom Data Solutions.
