Policies passed in 2017 that capped various real estate-related federal tax deductions limited housing price growth.

A set of tax policies advocated by President Trump two years ago have kept U.S. home prices about 4 percent lower than they otherwise would have been and have ultimately cost American homeowners a collective $1.04 trillion, according to new a analysis.

The tax laws passed at the end of 2017 and were championed both by the president and Republican lawmakers. Proponents of the policies characterized them as a way to cut taxes for people at multiple income brackets, though a number of analyses have argued that wealthy Americans and corporations were actually the biggest beneficiaries.

The new analysis — from ProPublica and based on data from a Moody’s Analytics economist and a retired investment management executive — shows that the 2017 changes to the tax code also reduced Americans’ net worth by limiting several real estate-related tax deductions, including for local and state taxes and for interest on a mortgage.

According to ProPublica, homeowners use these various deductions to help calculate the price they could afford to pay for a house. Ergo, when the deductions go down, people can afford to pay less and home values are stymied.

The ultimate result of this situation has been that home prices are 4 percent lower than they otherwise might have been without the changes to the tax code. ProPublica makes clear that this doesn’t mean prices fell 4 percent; instead it simply means they didn’t climb as high as they otherwise would have.

Citing the Federal Reserve Board, ProPublica also reported that the collective value of U.S. homes is $26.1 trillion. Applying the 4 percent number to that figure, then, shows that homeowners collectively lost $1.04 trillion in value thanks to the tax cuts and resulting reduction in price growth.

And of course this matters because for many Americans a house is their greatest store of wealth.

“This is a very big deal to families whose biggest financial asset is the equity they have in their homes,” Allan Sloan, author of the ProPublica report, wrote. “And there are untold millions of families in that situation.”

The affects of the 2017 tax law code changes haven’t been evenly distributed, with ProPublica reporting that counties in New York and New Jersey were the hardest hit.

Additionally, even people who aren’t themselves directly impacted by the tax changes are losing money because interest rates should gradually inch up as a result of the 2017 policies. And “higher interest rates for buyers translate into lower prices for sellers and therefore produce lower values for owners,” according to ProPublica.

The upside of all of this is that first-time homebuyers who purchased real estate after the 2017 tax code changes ended up paying less than they otherwise might have for a home. According to ProPublica, such people ended up being “modest winners.”

Email Jim Dalrymple II

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