Several months after President Trump signed the landmark Tax Cuts and Jobs Act (TCJA) into law, the economy is finally booming again. The nonpartisan Congressional Budget Office (CBO) projects GDP growth to be 3.3% by the end of 2018, proving that the Trump tax cuts have been a catalyst to rapid economic growth. This new growth is a welcome relief from 8 years of anemic economic stagnation under the Obama presidency.
The revitalized economy is a rising tide that lifts all boats. The tax cuts have been a boon to the housing market in several important ways.
First, the TCJA will inject at least $40 billion into the housing market in 2018 according to a recent report from Zillow. The report estimates that Americans will invest a collective $13.2 billion directly in the housing market by buying or renting larger homes. The report also states that Americans will use a collective $24.7 billion of their tax savings to renovate their existing homes.
Second, home prices are also growing at the fastest pace since 2006, and the median U.S. home value is up over 8.7% in the past year. This is great news for homeowners looking for a return on their investment when selling their homes.
Third, the GOP tax cuts have also incentivized Americans to buy homes. A record 7.8% of respondents to the Conference Board’s consumer confidence survey reported that they plan to buy a home within the next six months.
Fourth, homeownership is on the rise. After hitting an all-time high in 2017, homeownership is projected to increase from 73.9 million homeowners in 2017 to 74.6 million in 2018. In 2026, homeownership is expected to increase to 78.7 million.
Finally, Data from Bloomberg shows that home values are even rising in high-tax states like New York and California. Home values in the Hamptons rose 20% compared to a year ago, and home values in parts of San Francisco and California rose 25% compared to a year ago. Even the disastrous tax-and-spend liberalism plaguing much of the country can’t stop the booming housing market.
The facts are clear: Americans all across the country are benefiting from the Trump tax cuts. Individual provisions in the Tax Cuts and Jobs Act (TCJA) have put more money in the pockets of hard-working Americans. Over 90% of Americans have received a tax cut under the new tax code. Between 2018 and 2025, American individuals and families will see a $1.17 trillion tax reduction as a result of the bill. A family of four earning $73,000 will see over $2,000 in tax cuts, a tax reduction of 58% A single parent with one child earning $41,000 per year will see $1,304 in tax cuts, a tax reduction of 73 percent.
All of this has rejuvenated the economy. Under President Trump, the unemployment rate is at a 17 year low of 3.9%. The economy has added 800,000 jobs since Trump signed the GOP tax cuts into law, and the IMD World Competitiveness Center just named the U.S. the most competitive economy in the world. Hundreds of companies have announced pay increases, increased employee benefits, or bonuses since December.
The Trump tax cuts have made the housing market great again. Capital investments, home prices, home values, and homeownership are all on the rise. American families and individuals are using their tax savings to buy larger homes or renovate their existing homes. The strong housing market is yet another example of how tax reform has revitalized the economy.