How Homeownership Became the Engine of American Inequality
nytimes.com
nytimes.com
[1] Time to get on my customary soapbox: spend less, save more! You'll be happier today, and much happier in the future.
[2] Back on the soapbox: If you're an American making a professional salary, have no debt and are not maxing out your IRA and 401(k) contributions, there will be a moment in your future when you do the retrospective calculation on how much more money you would have if you had done so and be very sad. :) Minimize regret, and save more today!
So many of my coworkers do not contribute to their 401K at all, which is literally just leaving free money on the table.
Also, we could cap the home mortgage interest deduction, and it would still benefit the poor, but not the rich.
The question is whether this tax deduction actually promotes what you want. I think that the article casts a huge amount of doubt that it would.
You'd leave in place the break for the majority of middle-income wealth builders, close yet another loophole for the wealthy, and enrich lower income renters.
It would never ever happen with our current political climate (money is influence), but I feel like it would make sense. As the article mentions, a complete repeal of MID would be even more difficult.
Check this: http://www.paragon-re.com/3_Recessions_2_Bubbles_and_a_Baby
To me this long term trend is teling me that the drops are only temporary and contained for about 3-5 years. Sure if you buy at the peak, there is a chance that you might owe money to a bank for something you do not own (negative equity that is), but it will bounce back.
unless, you know, detroit thing happens, or that california defaults (because of pension crisis, etc), or it raises taxes too much.
i am not a fortune teller, obviously, but bay area has been its own bubble for quite a while now.
If prices vastly outstrip the ability of ordinary people to afford it, you're detached from reality.
[1] https://www.irs.gov/retirement-plans/plan-participant-employ...
We do have options though. Those will vest into millions... one day.... any day now....
Sorry to tell you now but this is the wrong way of looking at it.
The 401k will save you from paying tax the next 50 years. The first few years you might be a little behind but its worth it because later you'll have your contributions throttled. (assuming you can pay that much in)
How old are you?
You're probably thinking of the Great Depression.
The biggest benefit of 401Ks comes from your company provided match, because that's free money and instant ROI.
What do you mean by the "little guy/gal"?
It's true that the 2008 financial crisis only resulted in one banker going to jail, and he was not an executive. It's also true that the crisis only resulted in one bank getting indicted for criminal charges, and it was a small family-run bank in Chinatown with a stellar mortgage default rate (0.5%), and which reported activity that they discovered themselves, not a (metonymical) Wall Street conglomerate[0].
But if you're referring to people who own 401(k) accounts or receive pension funds, that's exactly who was bailed out. "Let the banks fail" is a common refrain, except what that literally translates to is letting people's retirement funds get wiped out due to impropriety that they weren't involved with at all.
[0] They identified an employee who had falsified loan applications, and reported it to regulators after firing the employee. They were acquired of all charges brought to trial, and the prosecutors themselves later requested that the charges be dismissed, because they realized how ridiculous they were.
In the 1930s, the bank stockholders were wiped out (equity set to zero), and they started over. In the 2008 crisis, bank stockholders were "bailed out". The value of their shares did not go to zero. The people who owned the bank before still owned it after. That is the difference between 401(k) accounts taking a 30% haircut and the bank stockholders retaining ownership of insolvent banks.
When the media talks about "too big to fail", they mean "too big to have stockholders wiped out and have the government recapitalize them". Supposedly it sounds too much like socialism. It is really regulatory capture at its finest.
From /r/personalfinance: https://i.imgur.com/fb7Dtmh.png
Worse it promotes moving to areas with the maximum possible jobs which destroys smaller towns and city's while creating even worse congestion.
Yep. But I still bought anyways, even though houses are what I consider "bad investments" if looking at them in the abstract:
* high transaction costs * illiquid * concentrated * requires maintenance ...
But the calculation was that since the local market and job market for me are amazingly hot right now, it'd transfer my variable costs into fixed costs and be a cash transaction.
Still worth it in some cases.
My spouse and I have done a ton of work on it, don't mind the maintenance issues, and we still get a kick out of just pointing to things and saying "that's ours!" (Okay, well... it's most the bank's. But still.)
I think "I'm sick of renting someone else's house" is a very non-negligible factor that's not often brought up in cost/benefit analyses like these.
(In overheated markets, 'rent+invest' can be better than 'own', but a full accounting needs to consider the cost of a living arrangement.)
As rents were cheaper in the previous decades compared to the monthly income, this mechanism would not be necessary. But basically burning half of ones income in order to live somewhere must return some value or around the world not only in the US we will have very poor renters and very rich home owners. This can even lead to even more radical political movements.
> this is of course a regulatory burden
One person's mere "regulatory burden" might be another's "theft at gunpoint."
The market would price this in, and then renters would just pay more for that right. Why not just leave the system as-is and let them buy if they choose?
OR there would be people getting kicked out of their rentals in order to avoid the "option" to buy becoming active, and then reactive legislation, and then ... a huge spiral of fights over market distortions that layer on top of each other.
Either end the mortgage interest deduction or allow rent to be deducted (at least in part).
You just made an argument for a forced-savings program, not for a home mortgage deduction.
Moreover, I think the issue with savings is a service problem, not an impulse control problem. Tax deferred accounts are complicated to figure out for a lot of people and it can be difficult to keep track of for people who don’t do regular, salaried work. I still have 2 or 3 401ks from previous jobs that I haven’t gotten around to rolling over just because coordinating with them and getting the form filled out is a bit of a hassle and it’s an easy thing to procrastinate on. And I have the advantage of actually knowing how this stuff works!
If it was as easy as just having a chunk of my salary taken out on a regular basis, and made opt-out rather than opt-in, you'd get a way higher participation rate.
The problem, as I see it, is FNMA and FDMC. Those entities, whose purpose was to ensure that a market for residential mortgages would exist, is now actually just engines for inflating housing prices and commoditizing low-risk real estate investment. They are the means by which an investor may become an absentee landlord without assuming any of the normal responsibilities of property management. Ordinary people volunteer to maintain and improve the investment properties, because they are offered the illusion of ownership.
A wise and shrewd financial plan can certainly make the mortgage system work in one's favor, to produce genuine ownership, but for the most part, it has done little more than create another class of resident somewhere between owner and renter: the mortgage-payer.
Having been both renter and mortgage-payer, and having seen some of the ugly hidden details of the US housing market, I do not recommend that anyone in the US software industry actually choose live in a mortgaged home except in the following places: New York City, Chicago, Washington DC, Austin, Seattle, Boston, Portland, Phoenix, Denver. (California properties near LA and SF are simply too overvalued, in my opinion.) Nowhere else has a sufficiently dense industry to ensure that one can work an entire career in the same place without sacrificing higher regular pay as an alternative to moving.
I would still like to actually own my own home one day, but as parent poster mentioned, I have done the math, and determined that I would be better off renting and saving, rather than borrowing and paying. And one of the major reasons why is that I have little sense of certainty with respect to where I will be living in five years, and that is roughly the absolute minimum timespan required before taking a mortgage can become less expensive for me than renting. Another is that any event likely to force me to move to find work is also likely to depress local property values. I would prefer to park my net worth in an asset that rises in value when people like me lose their jobs, and in assets that I am not forced to sell when I move, lest they become a financial burden. The money I save can be used to buy a retirement home, after I am done worrying about the consequences of place involved in moving around or staying put.
The problem with that mass-market forced-savings program is that dumping all your retirement funds into just one depreciating asset is just a horrible way to retain value. The only reason it works at all is because it forces people to literally sit on their nest egg. They must be aware and cognizant of everything happening to it, and actively defend against any threats to it. It forces people to be active investors in a market they are familiar with, because they live in their own neighborhoods.
I'd be interested in seeing a careful study of the degree to which the mortgage interest deduction actually plays a significant role in home ownership rates. But at least based on this article, it sounds like it's noticeably less significant than I'd thought.
If you're married filing jointly, your standard deduction is already $12000 -- which is more than you would pay in interest the first year on a $300,000 mortgage at 4% interest.
The median price of a home is $188,00 (http://m.huffpost.com/us/entry/4957604).
Above all, it is inefficient. By subsidizing bigger, more expensive houses, the policy misallocates scarce savings away from productive investments that raise living standards through income- and job-creating innovations. It also makes our financial system more vulnerable: as we wrote in an earlier post, it encourages people to take on risks – in the form of large, subsidized mortgages – that they are not equipped to bear. In the recent crisis, risky mortgage debt was sufficient to put the entire financial system at risk.
http://www.moneyandbanking.com/commentary/2015/6/3/why-the-m...
After that it's just a minor reduction in taxable income and your tax burden is only reduced by a fraction of your mortgage interest. Not enough to cover the costs of maintaining a home and the tendency to consume more housing when owning vs renting.
At the high end sure we are talking real money. Maybe some day it will all be high end housing and then it will more substantial.
Seriously. The global financial crisis of 2007-08 wasn't that long ago...
The financial crisis was the result of expansion of credit. What I suggest is a reduction in the tax burden of owning a home.
There are many valid reasons to be against my suggestion; the subprime crisis is not one of them.
EDIT: There was definitely some sarcasm in my suggestion. This is a hot button topic for a lot of progressives because the impact of being able to right off one's interest payments is viewed as regressive. I see arguments both ways.
Laws were loosened to allow more people to get into more risky loans to get homes. It incentivized a lot of people to take on mortgages they normally wouldn't qualify for.
I'm not talking about low income earners either. I had several friends who are upper middle class earners who suddenly purchased mansions on the lake, only to lose their house months later when the market collapsed. I also had other friends who suddenly realized the value of their homes went through the roof and took out two or three loans against that value, only to take it in the shorts when the market collapsed. Sure, the low income folks were hit pretty hard, but the middle and upper middle class folks got hoodwinked as well.
While I agree, it would help, it feels like its the same huge mess that we just came out of.
Not at all.
The housing crisis resulted from credit expansion. Specifically credit was extended to people that should not have been able to take on risk. A secondary cause was the structure of the debt (long term risk with short term volatility).
I'm suggesting reduction in one's tax base based on interest paid for existing debt, not the creation of new debt.
The couple of proposals to get rid of it still leave the MID in place up to $500,000 though which roughly matches what you found.
So when somebody says, "imagine if your investment accounts charged a percentage" that is precisely what mutual funds do.
Critical services banking on a bubble to sustain themselves is just a terrible (though often done) idea. Eliminating the bubble earlier and getting accurate valuations before becoming dependent on the inflated amount (and suffering from austerity efforts later) would be a much better (and rarely done) plan.
Without a property tax payment, my mortgage payments are very close to what rent should be.
In fact, a couple of years on, it's already less than rent for a comparable place.
Home ownership is a great deal in terms of tax treatment.
With that said, as a lot of people said, in high cost areas, it goes really quick, especially if you add municipal taxes which can also be deducted. So if you have 500 bucks a month in municipal taxes (which is kind of low in high cost areas), you're already halfway there. Add the interests (often half of your mortgage payments), and you're well beyond.
If you're in an area with million dollar houses being quite common (we are talking about the rich poor gap after all), you're talking about a 30-40k deduction easy, and even more for super rich.
One thing beyond that (any accountant in the crowd correct me if I'm wrong), the mortgage interest deduction for your primary residence is special in that it is one of the deductions that can be applied to AMT. So again, it helps the ultra rich.
I'm no 1%, but I am affected by AMT, and my place is in a high cost area, and this tax deduction is the only thing saving me from crapping my pants every year when I file my taxes.
Property tax is also for local use, such as schools, police, and city/county departments. Taxes for the state are mainly state income tax and state sales tax.
The only thing I can come up with as to why people think the deduction is so great is that people can be really bad at math and think removing tax on perhaps a few grand of income is a huge deal.. for the few thousand that are returned, I'm sure at least that much will be spent in home maintenance/repairs/tools/etc... I may sell soon and go back to renting.
The only part that makes it work out is home value appreciation, which is somewhat speculative and overall seems worse/equal to other standard investments.
1.) If you truly are "rich," then you pay for your home in cash. You do not take out a mortgage on your house. Look at a distribution of loan amounts, the vast majority are around $600k. Very few are are >$1M [0]. Home loans are a product for middle-class Americans.
2.) A lot of rich people don't really pay income taxes like middle class people do. This is something a lot of people fail to understand. For example, you can be multi-billionaire and make $0 in given year and still be a multi-billionaire.
3.) If you're rich, do you really care about the $20k deduction you get every year? Probably not.
4.) Interest rates are so low that the deduction is becoming less relevant. For example, if you take out a 3.75% loan on $600k, your deduction really isn't that much, you get to deduct a whopping ~$20k, which even if the highest tax bracket, you'll get back ~$10k The deduction argument holds a lot more weight when interests rates are high.
But glad to see more attacks on the "bourgeoise middle-class" from the trusty NYTimes.
There are a lot of families making $1 million gross ($500K net) in income. They live in SF and NY. Both parents work 10 hour days. They live in an uncomfortably small house and have a $1 million mortgage. They can barely save for college after paying for childcare costs and the mortgage. But they're "rich." Yeah, right.
Looking at the distribution of loan amounts would only be meaningful in the context of the distribution of home sale prices.
Obviously fewer loans are made for houses that fewer people are buying.
I concede I lack the data to prove my point, but common sense would tell you that these loans are almost all within the middle class home bracket.
Who NEEDS to take out a $750k loan in order to be able to buy a $8.5M house?
You might buy a house in cash if you're rich to get a better purchase price and have a quicker closing process. However, you would likely mortgage the house AFTER purchase and then invest that cash in a high dividend stock or some other security.
Only a rich fool would keep a house mortgage when interest rates are as low as 2.5% in some cases. (source: friend who has this interest rate)
For instance - there are some REITs that return dividends higher than 8%. What rich person would want to keep non-liquid capital tied up in home equity when there are plenty of high performing dividend stocks out there?
The low interest rates are also an incentive - but so is the tax deduction.
As a counterpoint, Mark Zuckerberg paid for his home with an adjustable rate mortgage, as reported in 2012:
http://www.sfgate.com/business/article/Mark-Zuckerberg-s-mor...
> What this means in aggregate is that households with at least six-figure incomes receive more than four-fifths of the total value of mortgage interest and property-tax deductions.
Your arguments about the "rich" and multi-billionaires miss the point.
Why not attack the bigger problems, like off the top of my head...
how housing has become a commodity and large equity firms and snatching up real estate...
the amount of foreigners buying homes...
the fact that we've barely built ANY housing in major cities in the past 30 years...
how our population has grown significantly, but our housing stock hasn't...
how people are living longer and staying in their homes longer for lack of better options...
Except that if you're in an increasing market it can push the sale price up.
A fetish for home ownership also screws up labor force mobility and reduces the granularity of variations in cost of living (some of which is discussed here). We'd be better off if large, publicly traded corporations owned most of the housing stock and provided it on long term lease (which is almost the situation today, but in the most complicated fashion possible). Then nobody would be "tied to the land".
> So, in effect, large, publicly traded corporations would then own the land, as you describe it? You think that's a good idea?
I don't mean it "in effect" I mean it explicitly. The advantages are large and the risks addressable:
- It spreads ownership around: the shareholders all own the housing stock the corporation owns. Thus they are buffered from the risks of a local market downturn.
- It makes moving easier (if you live in a place that suffers, say, a huge factory closure, you can't sell your house since everybody else wants to do so as well).
- It encourages a variety of housing types (single family to semi detached to large apartment blocks) and again buffers against, let's call it, "style risk").
And frankly when you have a large corp you can regulate some of the most egregious problems like fair housing rules, environmental and code issues, etc. Such companies are likely to be stable equities good for retirement funds etc similar to publicly traded utilities and less like airlines much less high tech businesses.
I also wonder how much of this is personal accountability, and I say this as someone who has voted for and willingly pays additional taxes to provide low income housing opportunities in my community. I mean one of the families that was highlighted was a family of 6 that lives off of $50k/yr with only one parent working. Personally I can't imagine raising one child on $50k/yr in the greater Boston area, let alone 4, and knowingly not trying to have both parents employed. The wife even mentions that the husband was out of work for 8 months...were you not trying to fill in the gap? Even a minimum wage job should cover the cost of day care for their youngest child, who is too young for full-time schooling. I'm really trying to be on the side of some of these folks, but their stories and situations find it hard for me to empathize.
In many markets, no it won't, if you can even find a daycare with an opening.
Anyway, this plan sounds like a net negative for the family unless the job can cover daycare PLUS commuting costs, work wardrobe, increased food costs (less time to cook from scratch), and the hassle involved with finding alternate care when any of the four kids are sick.
Some people consider the "humanity value" of having a parent at home to care for children to be worth the financial downside. That's their choice. By the way, most developed nations agree...
From the New Republic: *Among developed nations, the U.S. is now the only one that doesn’t guarantee some kind of paid employee leave available for new parents." http://bit.ly/2pZ03Ay
I think it would just help landlords, who would retain the ability to deduct mortgage interest as a business expense, and who would suddenly have both an influx of people kicked back into the renter pool and cheaper properties.
The real issue is lack of supply due to zoning and planning issues, and probably the cultural preference for single-family. Also the crazy-low rates.
Edit: To be clear, I'm not saying the MID is a great thing. If it didn't currently exist, I wouldn't be in favor of introducing it, and it was a huge windfall to whomever owned property when it was introduced. But what's done is done, and it would be pretty punitive to impose a negative windfall on every homeowner in America now. Maybe grant a one-time benefit when you change the tax code and let things sort themselves out from there?
It might work, but that is my reservation.
It is my understanding that all interest used to be tax deductible and college and home mortgage are the last ones remaining.
I also very much agree with your point that the main cause of high housing costs in the US are poor planning and zoning.
The US is still reeling from a strong racial divide, particularly in regards to homeownership. As stated in the article, banks would literally redline neighborhoods that weren't white enough as late as the 80s [2]. But it was worse than that, my parent's house (Built in the 40s) in the East Bay came with old covenant documentation stating that no POC were allowed to live in the home unless they were servants! Thats how bad it was in some areas as prosperous as the Bay Area, and we're still feeling its effects.
[1] https://www.census.gov/housing/hvs/files/currenthvspress.pdf [2] https://en.wikipedia.org/wiki/Redlining
Tax deduction for employer-insured healthcare?
I've bought three houses in my lifetime and the MIB was never even in the conversation in any of those purchases.
To the extent it factors into the monthly payment people can make, it impacts all the things you list.
Targeting an all in home payment (principle, interest, insurance, taxes) of 1/3 your $100K income, so $30K or $2,500 per month.
In a world with MID, the ~$1500 in interest payment each month can be paid with pre-tax money. Assume you're in the 30% bracket, that means an extra $450 each month. Now you can afford a mortgage that costs effectively $3000 per month, which comes out to another $50K to $75K in purchase price (rough estimate assuming 4% interest rate).
sounds like a great way to push up prices!
The MID indirectly affects the monthly payment on a home. It reduces the effective monthly payment.
Anecdotally, for me; it 1/7 discount on my mortgage cost. (Which I can realize more quickly by adjusting my w4)
> "In 2015," "That same year, the federal government dedicated nearly $134 billion to homeowner subsidies."
The article author isn't thinking of the Fed's various QE programs, which have subsidized lenders through the purchase of ~1.8 Trillion in mortgage-backed securities over a five year period after the financial crisis. MID is a drop in the bucket next to that.
If you treated the 1.8T as a single 30 year mortgage at, say, %3.5 interest, that's about a 10 Billion/month mortgage payment we're collectively carrying to bail out whoever sold those MBS to the Fed. That's about the same as the aggregate homeowner subsidies mentioned in the article.
1 - https://www.amazon.com/Color-Law-Forgotten-Government-Segreg...
Maintaining a relatively constant credit card debt (which is what it usually meant by "relying on credit cards" for routine purchases) is often more of a financial literacy problem than an income problem. It's obviously harder to get out of this trap on a low income, but if you're servicing your debt -- and if you're living off of credit cards long-term you have to be -- then your average income actually matches your average expenditures, including credit card interest charges. Someone in that situation would be so much better off if they could just pull together the few $1000's necessary to pay off the debt, and then start slowly accumulating savings from the money that would otherwise go towards interest payments. Unfortunately, the people I know who live on credit card debt seem willing to spend any small windfall that comes their way immediately, instead of using it to pay down those high-interest loans and start saving.
I have a brother-in-law who's in this situation. He makes $90k and has no dependents, but seems to have constant credit card debt that fluctuates between $10-$20k. That's an extra $1500-$3000 free and clear he could have every year by just paying off his cards and pocketing those interest payments, but for whatever reason he sees things differently and is totally content to carry that balance indefinitely.
Home equity is a contributor to the wealth effect. The wealth effect is a driver for consumer spending. Consumer spending is one of the more potent economic forces.
The mortgage deduction makes home ownership more affordable, but does not mean anyone can buy anywhere. Most people who rent can identify some other location in the US where they could afford to buy. They'd need a job that produces a sufficient income, and they'd need a down payment. But they need those with or without MID.
If we simply eliminated the MID, we'd see a period of volatility in real estate prices that would eventually settle out into a new equilibrium. But would that equilibrium be better overall for the economy? Would more people be able to own?
Certain homeowners with a mortgage could, almost overnight, go underwater with their home and on the other end homes could become more affordable under a smaller price point.
That would probably cause a crash in the housing market and leave many homeowners underwater on their mortgages. Phasing it out gradually seems like a better approach to me.
If you're in the currency manipulation / house flipping game, you ideally want to buy when interest rates are high and sell when interest rates are low.
To me that sounds tantamount to another tax on living. Anecdotally, owning in LA is cheaper than renting a comparably nice place. And that's irrespective of tax breaks.
Of course a family with 2 adults that are 10+ years older and waited a decade longer to have kids are going to be in a very different financial situation than a 26 year old single mom that makes 13% of the income of the couple. How does such an apples-to-oranges comparison remotely demonstrate that the MID is the "engine of American inequality?"
But perhaps the point is that the renter has no chance of escaping her current situation? The story of the homeowners proves that it is absolutely possible to do so. Recall that Asare grew up poor. While we don't know much about his wife's background, we do know that the two were also renters for years, before a nonprofit program helped them buy their first house.
Yesterday there was the thing about county wealth disparities. Something like that but more general.
TL;DR: The mortgage interest deduction is a welfare payment that you have to be rich (and until 1968, white) to get. Maybe we shouldn't spend $71 billion a year on it.
The fact is now, Oslo is experiencing what people are calling a housing bubble. Prices are also impossible given salaries (given conversion rates, they do not compare to the prices like in NY, for what it is worth.)
All these things tend to point to two directions: a) there is such a drive to own your own home here that it has done something to housing prices and b) they want people be maintain debt. Unlike the US, you can write off credit card and personal loan debt. It's a nice thing to be able to do but I'd presume that encourages a credit boom.
This quote is extremely misleading! There are not given aid, they are just not charged as much tax.
When people think "welfare queens" and "federal aid" they are talking about people who pay negative tax - they get more aid then their tax.
Simply not taxing people at 100% of their income should not be considered "aid".
If I buy a home, it's a depreciating asset. That is, I buy a home (via mortgage) for $300,000, and at the end of the mortgage, it's only worth $200,000. So I've paid $300K for an asset that's only worth $200K. But if I rented, at the end of the same time period, I have an asset worth $0, and still have to pay to live somewhere.
But of course it's not that simple. I can often rent for less than I can buy; I can invest the difference. If I don't live in the same house until I pay off the mortgage, I don't wind up with a place to live for free. If I downsize, I can wind up with a place to live for free and a chunk of cash. And so on.
Let's take one specific example. Suppose I have little cash. I could borrow $300K and buy a house. At the end of 30 years, I have a house. I've paid, what, $2000/month in payments. At the end of the deal, I have an asset worth $200K, in which I also can live for free (but I can't do both - I can get the $200K, or I can live in it for free). If I want the same deal putting the money into a mutual fund, I probably can't get it, because nobody's going to lend me $300K to invest in a mutual fund. The deal I can get is to rent for $1000/month, which gives me $1000/month to invest. At the end of the same amount of time, I have nothing to show for the $1000/month in rent except having not been homeless. For the $1000/month I've invested, I have... well, it's hard to say. What's your best guess about the rate of return of the mutual fund, and what's your variance around that best guess?
[0] https://www.forbes.com/sites/advisor/2014/04/24/why-the-aver...
[1] https://smartasset.com/mortgage/price-to-rent-ratio-in-us-ci...
I would love to see the numbers, though.
This is kind of like municipal taxes. Take the city of Cambridge in Mass, which has an absurdly low tax rate. Compare it with some of the cities near by (eg Somerville). A similar property in a similar location will bring you down roughly the same amount per month. But in Cambridge, the value of the property itself is way higher, mainly because less goes to the city and more goes to the bank (and your equity).
People factor in the deduction when they check what they can afford. If you save 12k a year in taxes, you can pay 1000 bucks a month more, which translates in a significantly more expensive property. If the deduction goes away, property value will adjust accordingly (blips down at first, maybe go up a little slower for a bit until things even out considering inflation and stuff).
People who currently have a property and cut it a little close might be in trouble if they are not grandfathered, and people selling in the short term might be a little sad.