Here are the key real estate-related items you need to know about the new tax bill.

Mortgage interest deductions have been reduced to a combined $750,000 of loan debt for primary residences and second/vacation homes. New homebuyers can deduct interest on up to $750,000 of combined mortgage debt. Current homeowners are grandfathered into the previous deduction to a combined debt limit up to $1 million. Proposals to eliminate the mortgage interest deduction on second and vacation homes were not passed with the new laws.

Interest deductions for home equity loan debt has been eliminated if you’re not using the money for home improvements. Previously, homeowners could deduct interest on home equity debt up to $100,000—even if those loans were taken to fund purchases outside of their homes, like a child’s college tuition. Now, you can only take an interest deduction for up to $100,000 of home equity debt if the loan is spent on your home.

Deductions for property taxes, as well as state income or sales tax, are now capped at a combined $10,000. Previously, homeowners could deduct the full amount for their local property taxes, as well as the full amount of either their state income or sales taxes. In 2018, you’ll be limited to a combined deduction total of $10,000 for state and local property, income and sales taxes.

Capital gains tax exclusions remain the same when you sell your house. Previous versions of the tax bill proposed cuts to the exclusion, but married filers can still exclude up to $500,000 when selling their primary home, as long as they’ve lived there two of the past five years.

Moving expenses are no longer deductible. Currently, you could deduct reasonable moving expenses if you met certain requirements, but that deduction has been eliminated.

What does this mean for the real estate industry in 2018?

Inventory will remain a challenge. Many homeowners have already been staying in their houses for longer because of their sub-4 percent loans, and the declines in mortgage interest deductions for new purchases may further affect their willingness to sell.

Nationwide, about 3.9 percent of home loans exceed $750,000, according to ATTOM Data Solutions. That figure varies in Long & Foster’s markets along the East Coast, from sub-1.0 percent in more rural counties to near double-digits in the cities and coastal communities. In those higher priced areas, the reduced mortgage interest deduction and the $10,000 cap on deducting property taxes may discourage would-be sellers from listing their homes and moving up.

Price adjustments may occur in the upper brackets. With the mortgage interest and property tax deductions lowered, the cost of home ownership is higher in the upper price ranges. That may drive buyers in the $1 million to $3 million brackets to look for price adjustments to accommodate the increased cost.

While tax reform will likely have an effect on the housing industry, ebbs and flows are a normal occurrence in the real estate cycle. Just as Long & Foster has done for the past almost 50 years, we’ll make sure our clients are well prepared and informed to achieve their real estate goals now and in the future.