Kiplinger

Where Home Prices Are Headed in 2018

New Jersey is the poster child for the high-cost, high-tax states where housing markets--and homeowners--are supposed to suffer under the new tax law. Patrice and Kalvin Sosoo, of Teaneck, N.J., have a toddler, Kingsley, and a baby on the way, so they're in the market for a larger place. But the Sosoos aren't deterred by the new rules, even though housing costs for their next home are likely to be higher.

Under the new law, homeowners with existing taken out before December 15, 2017, can continue to deduct interest on up to $1 million of mortgage debt. After that date, the limit for all "acquisition debt"--money used to buy, build or substantially improve a home--falls to $750,000. The deductibility of interest on home-equity loans or lines of credit, old or new, that are used for other purposes--such as paying for a vacation, a car or a --disappears. Plus, the deduction for state and local taxes, including property taxes, will be capped at $10,000.

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