This Week in Real Estate: April 9, 2018

New construction is vital to meeting demand and normalizing inventory levels. The NAHB released This Week in Real Estate that total private residential construction spending was up 5.5% over the past 12 months—a positive indicator of continued future spending. Below are a few highlights from the first week of April that influence our business:

* U.S. Property Taxes Levied on Single Family Homes in 2017 Increased 6 Percent to More Than $293 Billion. ATTOM Data Solutions released on Thursday its 2017 property tax analysis for more than 86 million U.S. single family homes, which shows that property taxes levied on single family homes in 2017 totaled $293.4 billion, up 6 percent from $277.7 billion in 2016 and an average of $3,399 per home – an effective tax rate of 1.17 percent. The average property taxes of $3,399 for a single family home in 2017 was up 3 percent from the average property tax of $3,296 in 2016, and the effective property tax rate of 1.17 percent in 2017 was up from the effective property tax rate of 1.15 percent in 2016. Out of the 217 metropolitan statistical areas analyzed in the report, 125 (58 percent) posted an increase in average property taxes above the national average of 3 percent.
* Private Residential Spending Grew in FebruaryNAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate of $533.4 billion in February, a gain of 0.1% from the upwardly revised estimate of January. Over the past 12 months, total private residential construction spending was up 5.5%. Single-family construction spending increased 0.9% after advancing at the same margin in January. Spending on multifamily construction was up 1.2% after a decline of 1.7% in the prior month, reaching a $63.8 billion annual pace in February. Remodeling spending declined for the second month in a row, down 1.5% in February. On a year-over-year basis, however, spending on home improvements increased by 1.4%.
* The Hot Debate: Can You Deduct Prepaid Property Taxes? With just two weeks to go before the April 17 deadline, prominent tax advisers still don’t agree on whether all those people who prepaid 2018 property taxes can deduct them in full. The debate on such deductions arose after Congress passed the largest tax overhaul in three decades late last year. In a landmark change, lawmakers capped write-offs for state and local taxes at $10,000 per return for both single filers and married couples. The provision takes effect for 2018 and will lower these write-offs for millions of Americans. The overhaul barred deductions for many prepayments of 2018 state and local income taxes, but it was silent on deductions of prepaid property taxes. Then on Dec. 27, the Internal Revenue Service warned that not all prepayments of 2018 property taxes would be deductible on 2017 returns. The agency said that to qualify for a write-off, the tax liability actually had to have been known at the time.
Have a productive week.

Jason

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