President Donald Trump‘s One Big Beautiful Bill Act, which House Republicans narrowly passed on Thursday, is likely to help high-end buyers in the U.S. housing market while doing little for lower-income renters and potential first-time buyers, experts have said.
The House passed the sweeping bill, which extends tax cuts and slashes the U.S.’s social security net programs, with a 218-214 vote—with all Democrats voting against it and all but two Republicans supporting it.
The bill has been strongly contested over the past few weeks, exposing rifts within the GOP. Its approval marks a significant win for the president, who told reporters on Thursday that the legislation would “make this country into a rocket ship.”
“This is going to be a great bill for the country,” Trump said. The president is expected to sign the bill into law on July 4.
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Numerous experts have expressed skepticism that the bill will bring positive changes for everyday Americans. Many economists have denounced the bill, saying it is likely to benefit the wealthiest individuals in the country while stripping poorer families of crucial benefits.
“There has never been a single law in U.S. history that has hurt low-income households more, from both the largest Medicaid cuts and the largest SNAP cuts in history,” Bobby Kogan, a former top numbers cruncher for the Senate Budget Committee, said in a statement shared with Newsweek.
He added: “And what’s particularly egregious is this bill hurts low-income households while simultaneously bestowing huge tax cuts on the richest Americans. Quite literally, this bill makes the poor poorer while making the rich richer.”
The bill is also likely to affect the struggling U.S. housing market, which is in the midst of a slowdown as inventory surges while buyers are kept to the sidelines by elevated mortgage rates, sky-high prices, rising costs and growing economic uncertainty.
“There are several parts of the bill that could affect real estate and housing markets, but its impact won’t be uniform,” Realtor.com senior economist Jake Krimmel told Newsweek. “Its overall impact is likely to vary significantly across regions and income groups, depending on local tax burdens, home prices, and how tight supply is,” he said.
“That’s because the bill includes provisions that affect both housing demand and housing supply, and they operate differently in different parts of the country—especially given today’s large regional divides in local economic conditions.”
High-End Buyers, Investors and Professionals to Benefit the Most
The tax package passed by Congress includes a provision raising the cap on the state and local tax (SALT) deduction to $40,000—effectively quadrupling the previous $10,000 limit. For homeowners in certain states and metros, this could mean saving thousands of dollars in annual taxes.
Ed Fernandez, the president and CEO of exchange investment company 1031 Crowdfunding, told Newsweek that the measure “would be incredibly productive” and “create a real estate boom again.”
This change, however, “disproportionately benefits higher-income buyers in high-tax states like New York, New Jersey, Massachusetts, and Illinois—regions where housing markets remain tight and prices elevated,” Krimmel said.
The states with the highest share of properties taxed over $10,000, according to Realtor.com data, are New Jersey (39.9 percent), New York (25.9 percent), Connecticut (19.4 percent), California (19.3 percent), Massachusetts (18.4 percent), New Hampshire (16.3 percent), Illinois (13.7 percent), Texas (12.4 percent) and Rhode Island (9.3 percent). The District of Columbia (15.6 percent) is also included in the top 10.
The top 10 metros are San Jose-Sunnyvale-Santa Clara, California (47.9 percent); New York-Newark-Jersey City, New York-New Jersey (47.8 percent); San Francisco-Oakland-Fremont, California (40.9 percent); Bridgeport-Stamford-Danbury, Connecticut (39.3 percent); Kiryas Joel-Poughkeepsie-Newburgh, New York (37.5 percent); Trenton-Princeton, New Jersey (35.8 percent); Nantucket, Massachusetts (35.5 percent); Austin-Round Rock-San Marcos, Texas (32.0 percent); Jackson, Wyoming-Idaho (28.7 percent); and Santa Cruz-Watsonville, California (28.1 percent).
An additional $30,000 in deductions could amount to about $10,500 in annual tax savings for homeowners in these states and metros, assuming a 35 percent federal marginal tax rate, Realtor.com calculated.
The higher SALT deduction cap “may supercharge demand in places where affordability has already been declining and inventory remains below pre-pandemic norms, potentially adding upward pressure to already strained markets,” Krimmel said. That means that your average buyer in these already-expensive states and metros might face even higher prices as a result of the One Big Beautiful Bill Act.
“In the near term, the bill offers meaningful support to higher-income buyers and real estate investors but does less comparatively for lower-income renters and potential first-time buyers, who are still facing the steepest affordability challenges in today’s housing market,” Krimmel said.
A permanent qualified business income deduction that the bill introduces is also likely to give an advantage to real estate investors and professionals, potentially fueling more investment in both residential and commercial property, Krimmel said.
While everyday Americans may not benefit from the changes introduced by the new legislation, professionals are thrilled. Abe Schlisselfeld, the senior managing director and national real estate industry leader at CBIZ—a company that provides financial, insurance and advisory services in the U.S. and abroad—told Newsweek that the bill was “a big win for the real estate industry.”
One of the most attractive provisions for real estate investors in the bill is the return of 100 percent bonus depreciation, he said.
“This would allow you to fully deduct the cost of qualifying renovations, property improvements, and certain building components immediately, instead of spreading the deductions out over several years,” Schlisselfeld said. “This could be a game changer for your 2025 renovation or development plans,” stimulating a significant amount of activity.
A special depreciation allowance for qualified production property contained in the bill might also “create an additional tax advantage for investors in logistics, warehousing, or production-related facilities,” Schlisselfeld said.
Lower-Income Buyers Unlikely to Catch a Break ‘Anytime Soon’
The bill is also likely to affect the U.S. housing market on the supply side by expanding the Low-Income Housing Tax Credit and making tweaks to opportunity zone incentives, Krimmel said. These are tools that support affordable housing, community redevelopment and increasing housing supply “where it’s so desperately needed,” he said.
While these measures could help address the national housing shortage—including in rural areas and in lower-income urban neighborhoods—”large-scale supply-side impacts will take time and aren’t likely to relieve pressure in high-cost cities anytime soon,” Krimmel said.
Several sections of the bill also terminate the Energy Efficient Home Improvement Credit, the Residential Clean Energy Credit, New Energy Efficient Home Credit and the deduction for energy efficient commercial buildings.
An analysis by the think tank and progressive advocacy group Groundwork Collaborative found that abolishing the New Energy Efficient Home Credit, which incentivized the construction of energy efficient homes and was estimated to spur the construction of 3 million homes in the next few years, would increase the price of new homes.
“Now, builders that were expecting the credit will likely pass the cost on to consumers or cancel the construction of new homes altogether, further disrupting the housing supply and increasing costs,” the group said.
Construction of new homes in the U.S. has already significantly slowed down since the Trump administration’s introduction of sweeping tariffs that brought up the cost of crucial material. A surge of for-sale listings in the U.S. market is also discouraging builders from hiking up production.