The tax bill released today halved the size of new mortgages from which interest can be deducted, from $1 million to $500,000. That will hit prices of homes valued at over $500,000, and the grandfathering of the existing deduction will also reduce liquidity in that market segment. But, given only 15% of homes sold for over $500,000 in August, and with most Americans set for a small tax cut, the impact on the overall housing market of this bill is likely to be slightly positive.
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