How Closing Costs Might Help at Tax Time

When you finalize a home purchase or refinance, you'll face a range of closing costs that can add up quickly. Most of the time, these charges include fees for appraisals, inspections, loan processing, and taxes. While most of these expenses are just part of the cost of doing business, some of them might actually save you money later—if they qualify as tax deductions.

Closing costs can range anywhere from 2% to 6% of the total loan amount, depending on whether you're purchasing a home or refinancing. Buyers usually carry the bulk of these costs, though sellers often contribute as well, especially in markets where negotiations are flexible. Common fees include charges for loan origination, underwriting, and credit reports, as well as appraisal and inspection costs. Title search fees, title insurance, and discount points paid to lower your mortgage rate are also standard line items.

In most cases, the IRS doesn't allow you to deduct closing costs since they're considered part of the overall purchase expense, not an operational cost tied to the home's use. However, there are a few exceptions. Mortgage interest is one of the most common deductions and is allowed on loans up to $750,000, or $375,000 if married filing separately, as long as the loan was taken out after December 15, 2017. Older loans may qualify for higher limits. You can deduct interest payments each year, as long as you still own the home and itemize your deductions.

Another possible deduction comes from mortgage points, which are considered prepaid interest. If certain requirements are met, the full amount of points paid may be deducted in the year you paid them. If not, the deduction can be spread out over the life of the loan. Private mortgage insurance, or PMI, might also be deductible if your income falls below IRS limits and you itemize your taxes. Property taxes are another potential deduction, both those paid at closing and annually, though these are capped at $10,000 per year for married couples filing jointly or $5,000 if filing separately.

For buyers of distressed properties, costs related to necessary repairs and maintenance might also be deductible under certain conditions. These deductions can usually be claimed in the year you pay them, over the course of your mortgage, or when you sell the property by adding them to your cost basis.

The 2017 Tax Cuts and Jobs Act impacted many of these deductions by increasing the standard deduction, making it less beneficial for some homeowners to itemize at all. As a result, fewer people are writing off mortgage interest and property taxes. However, these provisions are set to expire at the end of 2025, so tax benefits may shift again in the near future.

It's also important to understand which costs are never deductible. This includes expenses like appraisals, home inspections, legal fees, title insurance, transfer taxes, surveys, and document preparation. Likewise, homeowners insurance, utility bills, and general repairs are not deductible. Still, some of these charges may be added to your home's cost basis, which could reduce your capital gains taxes if you sell the home down the road.

After closing, it's wise to keep every document related to your purchase or refinance. If you're ever audited, you'll want proof of what you paid and when. And since the rules can be confusing and depend heavily on your specific situation, it's always best to consult a tax expert or financial planner to ensure you're making the most of any possible deductions.

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A high-stakes battle over the future of Louisiana's port infrastructure is heating up, as Plaquemines Port makes a renewed push for an alternative to the $1.8 billion container terminal project planned by the Port of New Orleans at Violet in St. Bernard Parish.

Charles Tillotson, executive director of Plaquemines Port, is lobbying Governor Jeff Landry and top transportation officials to consider a rival site farther downriver. His proposal: a joint 50/50 venture between Plaquemines and Port NOLA, placing the terminal near mile marker 50 of the Mississippi River, around West Pointe à la Hache on the West Bank. That's approximately 35 miles south of the current Violet site.

In response, the Landry administration has taken a hands-off approach, encouraging continued dialogue between the two ports while withholding support for either plan. Julia Cormier, commissioner of the state's Office of Intermodal Transport, emphasized that neither project has been reviewed by the new Louisiana Port and Waterways Investment Commission, a body created by Governor Landry to resolve conflicts and guide strategic port development across the state.

"For the state to take a position supporting one over the other would be irresponsible," Cormier said.

The dispute highlights deep strategic divisions over how to reclaim market share in the fast-growing container shipping sector. While ports in Houston and Mobile have surged in volume — fueled by significant private investment and industrial partnerships — Port NOLA's container volume has remained stagnant.

Port NOLA's proposed Louisiana International Terminal in Violet is designed to solve one major problem: current facilities upriver, like Napoleon Avenue, can't accommodate today's larger container ships due to limitations posed by the Crescent City Connection bridge. Violet, located downriver from the bridge, offers better access — and the port has already made substantial progress, acquiring 1,100 acres of land, securing $800 million in private investment, and receiving a record $300 million in federal grants.

Despite this momentum, the Violet plan has faced local pushback. The St. Bernard Parish Council opposes it unanimously, citing concerns about infrastructure, traffic, and environmental impact. Several lawsuits have emerged, and the project hinges on federal permitting and construction of a toll road to connect the terminal to the interstate.

Tillotson argues that the West Bank site offers significant logistical advantages. Its proximity to the mouth of the river and location along a straight, wide stretch of the Mississippi would allow ships to cut travel time and costs—up to $400,000 per call. He also cites the site's potential rail access through a Union Pacific line, which could provide better connectivity to key inland markets like Dallas.

Additionally, its closeness to strategic assets like the Belle Chasse Naval Air Station and the Avondale Gateway industrial zone is seen as a potential benefit, although those advantages have not been fully detailed publicly.

Port NOLA officials remain firm in their commitment to the Violet project. CEO Beth Branch, who assumed leadership in December, has signaled that construction could begin this year, pending final approvals from the U.S. Army Corps of Engineers.

Board Chair Michael Thomas responded to the Plaquemines pitch with skepticism, pointing out that Port NOLA already owns its site, while Plaquemines Port does not. He also cited major concerns: the Plaquemines site is outside the region's flood protection zone and currently lacks completed rail infrastructure, which could lead to costly delays, lawsuits, and environmental scrutiny.

"We're the only deepwater port in the country with six Class One railroads," Thomas said. "Currently, they do not have railroad connectivity."

Tillotson has hinted that Plaquemines Port will move forward with its own terminal regardless of whether Port NOLA agrees to a joint venture. The port has already signed a nonbinding agreement with APM Terminals, a global operator owned by A.P. Moller-Maersk. Notably, APM also operates terminals in Mobile and Houston — raising concerns among Port NOLA officials about potential conflicts of interest in competitive port development.

Plaquemines Port is also poised for rapid growth, thanks in large part to the $21 billion liquefied natural gas export facility being developed by Venture Global. The plant, which began production in December, is expected to significantly boost the port's tonnage in the coming years.

The showdown between Port NOLA and Plaquemines Port is emblematic of a broader challenge Louisiana faces: how to develop a unified port strategy in a state known for fragmented regional interests. With both container terminal proposals backed by private capital and targeting overlapping markets, coordination is crucial to avoid redundancy — or worse, internal competition that hinders progress for both.

For now, the state has chosen to remain on the sidelines, urging both sides to find common ground. But with billions of dollars, critical infrastructure, and Louisiana's place in the global shipping economy on the line, that neutral stance may not hold for long

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In the heart of New Orleans' Central Business District, walls once overlooked are now bursting with life, thanks to a sweeping public art initiative ahead of Super Bowl LIX. What was once a sea of beige buildings and concrete facades has become a vibrant visual tribute to the city's spirit, culture, and people.

Among the most striking new additions is The Welcoming Committee, a 120-foot-long mural by local artist Annie Moran. Painted on the side of a parking garage on Girod Street, just steps away from the Caesars Superdome and Smoothie King Center, the mural is impossible to miss — and even harder to forget.

A Mural That Greets the World

The mural is a towering celebration of New Orleans' defining traits: hospitality, heritage, and artistic flair. Though the exact height is hard to pin down — Moran estimates around 50 to 60 feet tall — the impact is clear from blocks away.

At its center is a powerful figure: Queen Elenora Rukiya Brown, a Black Masking Indian Queen, arms outstretched in welcome. Moran calls Brown her "muse" and "matriarch," and has painted her three times throughout her career. Brown, a renowned artist in her own right who beads intricate suits for Mardi Gras, serves here as a symbol of the city's legacy of strength, creativity, and hospitality.

Surrounding her are other familiar icons: a chef in classic whites, energetic dancers, and local touches that make the mural unmistakably New Orleans.

More Than Just Game Day

While the mural was timed to coincide with the city's hosting of Super Bowl LIX, its purpose extends far beyond a single sporting event. Commissioned by the Arts Council of New Orleans and funded by the Helis Foundation, The Welcoming Committee is designed to be a lasting piece of public art — one that reflects the soul of the city while inviting others in.

Moran says the directive was clear from the beginning: the mural should serve as a cultural ambassador, welcoming both Super Bowl guests and future visitors alike. But more than that, it's a love letter to New Orleans itself.

"Hospitality is just a cornerstone of our culture," Moran said. "It's not just the hotels and the food — it's the arts. That's why so many people come here. They feel it. They feel welcome."

A Super Bowl Boost for Local Artists

This year's Super Bowl has sparked an unprecedented wave of investment in public art across the city. Dozens of murals have emerged, created by local heavyweights like Brandan "BMIKE" Odums, Carl Joe Williams, and Patrick Henry, among others. The initiative has brought both visibility and financial support to New Orleans' art community.

For Moran, it's been a defining moment. Known more for her interior mural work, this project marks her highest-profile endeavor yet — and her first major exterior mural. The scale and visibility of The Welcoming Committee have opened new doors and challenged her creatively in ways she never expected.

"I had to at least try," she said. "I knew this was an opportunity I couldn't say no to."

A Lasting Legacy in Paint

As crowds pour into the city for the Super Bowl, many will pass Moran's mural without knowing her name or the story behind it. But they'll feel what she hoped to convey — the warmth, the welcome, the unmistakable energy of New Orleans. Long after the game ends and the stadium lights dim, The Welcoming Committee will remain, arms open, inviting everyone to feel at home in the Crescent City.

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In recent years, prospective homebuyers have faced significant challenges in securing their dream homes. Limited housing inventory, increasing competition, a preference for cash buyers, and rising down payment expectations have all contributed to a tense market environment. For first-time buyers, these hurdles have been particularly pronounced, as they work to balance market pressures with the realities of finding a home that fits their budget.

On top of these difficulties, interest rates have climbed dramatically. With several rounds of interest rate hikes and high 10-year treasury yields, mortgage rates have reached their highest levels in two decades. These increased rates have reduced purchasing power and driven up monthly payments, leading to hesitation and uncertainty among would-be homeowners.

Despite these obstacles, Ralph McLaughlin, senior economist at Realtor.com, offers some insights on how buyers can still successfully navigate the market and find a home that fits their price range, even in this high-interest rate environment.

Exploring Mortgage Options and Buydown Credits

For many, high mortgage rates are a significant barrier. While securing a low rate would be ideal, homebuyers may not realize that they have more options than they think to reduce their rates and monthly payments. According to McLaughlin, there are several avenues buyers can explore.

Refinance Down the Road

One straightforward strategy is to purchase a home within budget and plan to refinance when mortgage rates inevitably drop in the future. This approach allows buyers to take advantage of current opportunities while maintaining flexibility for the future.

Consider a 15-Year Mortgage

McLaughlin recommends considering a 15-year mortgage as an option. These loans often come with rates 1 to 1.5 percentage points lower than 30-year mortgages. The advantage of a 15-year term is that buyers can pay off their mortgage in half the time, while the monthly payments will not be double that of a 30-year loan, as many assume.

"Many buyers think their payment will double when they opt for a 15-year mortgage instead of a 30-year mortgage, but that's not the case at all," McLaughlin said. "Typically, the payment will only be 50% to 60% higher."

Explore Adjustable-Rate Mortgages

Another potential strategy is an adjustable-rate mortgage (ARM). ARMs tend to offer lower rates than 30-year fixed mortgages, sometimes even lower than 15-year mortgage rates. While this presents an opportunity for reduced monthly payments, buyers need to understand the potential risks.

"Adjustable-rate mortgages generally come with lower initial rates, but the tradeoff is that after a few years, the rate could adjust upward," McLaughlin explained. "Buyers should carefully weigh the pros and cons, as they may need to refinance after five to seven years if rates drop below their current ARM rate."

Take Advantage of Buydown Credits

One lesser-known but effective strategy is negotiating buydown credits with the seller. A buydown credit allows buyers to reduce their mortgage rate by prepaying interest upfront, often with the help of the seller. This can be particularly beneficial for buyers in a high-rate environment.

"Buyers can negotiate with the seller to provide a credit that lowers their mortgage rate for the first few years," McLaughlin said. "This strategy is more common when sellers are motivated to close the deal, especially in a slower market."

By negotiating a buydown credit, buyers might secure a more manageable rate—such as reducing it from 7% to 6%—by paying part of the interest upfront, which can make monthly payments more affordable.

While the current housing market presents several challenges, there are still opportunities for buyers to secure a home within their budget. By exploring different mortgage options, such as 15-year loans, adjustable-rate mortgages, and buy-down credits, buyers can reduce their monthly payments and position themselves for future refinancing when rates decrease. With some strategic planning, first-time homebuyers can still achieve homeownership, even in today's high-interest rate environment.

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Is Bigger Back? Signs Point to a Rebound in New Home Sizes for 2025

After years of fluctuating demand and shifting homeowner priorities, the size of newly built single-family homes may be on the rise once again. Following a period of decline driven by rising interest rates and affordability concerns, fresh data from the end of 2024 hints at a possible reversal in home size trends heading into 2025.

According to fourth-quarter 2024 data from the U.S. Census Bureau's Quarterly Starts and Completions by Purpose and Design, analyzed by the National Association of Home Builders (NAHB), both median and average square footage for new single-family homes have increased—a potential signal that homebuyers are once again prioritizing space as long-term interest rate expectations soften.

By the Numbers: Room to Grow?

In Q4 of 2024, the median square footage for newly built single-family homes rose to 2,205 square feet, the highest level seen since mid-2023. The average (mean) size climbed to 2,417 square feet, while the one-year moving average ticked up to 2,373 square feet, with the median on that basis landing at 2,162 square feet.

These figures are notable after a steady trend of declining home sizes from 2021 through much of 2023, driven largely by rising mortgage rates and shrinking affordability for buyers across many markets.

A History of Home Size Trends

Over the last 15 years, the average size of new homes has mirrored broader economic and market forces. From 2009 to 2015, home sizes grew significantly as builders focused more on higher-end buyers amid a sharp decline in entry-level construction following the housing crash.

From 2016 to 2020, however, a surge in starter home development helped drive average home sizes down. That shift was briefly reversed during the post-pandemic housing boom, when historic low interest rates and changing lifestyle needs led many buyers to seek larger homes that could accommodate work, school, and leisure under one roof.

But as the Federal Reserve raised interest rates through 2022 and 2023 in an effort to control inflation, housing affordability worsened and buyers pulled back. The demand for larger homes receded, and average home size fell accordingly.

What's Fueling the Potential Rebound?

The current upswing in size, though still modest, could reflect growing market optimism that interest rates may decline in 2025, restoring some purchasing power to buyers. If long-term borrowing costs ease, families may once again seek more spacious homes—especially as hybrid work, multi-generational living, and flexible home layouts remain priorities for many Americans.

Another factor may be the resilience of higher-income buyers, who are less sensitive to mortgage rate changes and continue to drive demand for larger, feature-rich homes.

Additionally, builders themselves may be adjusting their product mix, scaling back entry-level offerings in favor of larger, more profitable homes that better absorb rising construction costs.

Looking Ahead to 2025

While it's still too early to declare a full rebound in home sizes, current data suggests that the floorplan contraction of recent years may be reaching a turning point. As mortgage rates stabilize and housing supply remains constrained, builders may increasingly turn to larger homes as a way to meet consumer preferences and maintain margins.

If interest rates ease further as forecasted, the trend toward bigger homes could gain momentum in 2025, signaling a return to more expansive suburban living—and perhaps a fresh chapter in America's ongoing love affair with space.

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The housing market ended 2024 on a strong note, with single-family construction rising in December despite ongoing economic pressures such as high mortgage rates, elevated financing costs, and a shortage of buildable lots.

According to a recent report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts surged by 15.8% in December, reaching a seasonally adjusted annual rate of 1.50 million units—the highest level since February 2024.

Single-Family and Multifamily Construction Trends

While single-family housing starts increased by 3.3%, reaching a 1.05 million annualized rate, the multifamily sector experienced a much sharper rise. Multifamily starts, which include apartment buildings and condominiums, jumped by 61.5% in December, hitting a 449,000-unit pace.

Despite this late-year boost, total housing starts for 2024 reached 1.36 million, marking a 3.9% decline from 2023's total of 1.42 million. However, single-family construction showed resilience, with 1.01 million new starts in 2024—up 6.5% from the previous year. The National Association of Home Builders (NAHB) predicts that single-family homebuilding will see modest growth in 2025, driven by ongoing housing shortages and a strong economic backdrop.

In contrast, multifamily starts for 2024 saw a significant 25% drop from the previous year. As of December, there were 1.7 apartments completing construction for every new apartment breaking ground, signaling a slowdown in multifamily expansion. Experts anticipate that multifamily construction will stabilize in late 2025, supported by a low national unemployment rate and improving financial conditions.

Completions and Regional Trends

Single-family home completions in 2024 ended on a positive note, rising 2.2% compared to the previous year. Multifamily completions saw even stronger growth, rising 35% year-over-year, with two- to four-unit buildings ("missing middle" housing) increasing by 42.5%. This surge indicates a growing demand for medium-density housing, which could expand further with zoning reforms.

Regionally, combined single-family and multifamily starts for 2024 varied across the country:

• Northeast: +9.1%
• Midwest: -0.1%
• South: -5.2%
• West: -7.7%

Permits and Future Outlook

Building permits, which indicate future construction activity, declined by 0.7% in December to an annualized rate of 1.48 million units. Compared to December 2023, permits were down 3.1% overall, though single-family permits saw a slight 1.6% increase to 992,000 units. Multifamily permits dropped 5% to a 491,000-unit pace.

For the full year, total permits in 2024 reached 1.47 million, reflecting a 2.6% decline from 2023. However, single-family permits totaled 981,000—up 6.6% from the previous year, which is a positive indicator for 2025.

The number of single-family homes under construction stood at 641,000 in December, down 5.3% year-over-year. Meanwhile, the number of apartments under construction dropped 21% from the previous year, reaching 790,000 units. The multifamily pipeline peaked in July 2023 at 1.02 million units and has been steadily declining since.

Despite economic headwinds, the housing market showed resilience in December, with single-family home construction continuing its upward trajectory and multifamily completions reaching a high point. While 2024 saw an overall decline in total housing starts and permits, the steady growth in single-family construction and missing middle housing signals optimism for 2025. With ongoing demand and a persistent housing shortage, the market is expected to stabilize in the coming year.

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New-Home Sales End 2024 on a High Note Despite Affordability Challenges

A limited supply of existing inventory, coupled with strong demand, helped new-home sales finish 2024 on an upward trajectory, even as buyers continued to navigate affordability concerns.

Sales of newly built single-family homes in December increased by 3.6%, reaching a seasonally adjusted annual rate of 698,000. This figure, based on data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, represents a 6.7% increase compared to December 2023. Throughout the year, new-home sales totaled 683,000, marking a 2.5% rise over 2023.

Looking ahead to 2025, forecasts suggest a modest gain in new-home sales, supported by stable macroeconomic conditions and a robust labor market. Additionally, builders remain cautiously optimistic about the construction industry, anticipating potential regulatory changes following the 2024 election that could ease constraints and streamline the building process.

New-home sales are recorded at the time of a signed contract or accepted deposit, regardless of construction stage. The December reading of 698,000 units represents the annualized sales rate if this pace were to persist for 12 consecutive months.

Inventory levels for new single-family homes continued their steady rise, reaching 494,000 units in December—a 10% increase from the previous year. This equates to an 8.5-month supply at the current construction pace, ensuring ample options for prospective buyers. Notably, the number of completed, move-in-ready homes rose by 46% year over year, totaling 118,000 units.

The combined inventory for new and existing homes remained constrained, with new-home supply at 8.5 months and the resale market at just 3.1 months. This brought the overall housing market's supply to a four-month level—the lowest since April 2024. The market has not approached the six-month benchmark, typically indicative of equilibrium between supply and demand, since 2012.

The median sales price for a new home in December was $427,000, reflecting a 2.1% increase from a year earlier. While prices have edged up, builders continue to find ways to offer more affordable options to meet buyer demand.

Regionally, the Midwest experienced the most significant growth in new-home sales, posting a 19% year-over-year increase. The Northeast saw a 1.7% uptick, while the West recorded a 2.6% gain. The South, however, experienced a slight decline of 0.2%, though it remained the largest market for new-home sales.

As 2025 begins, the new-home market remains well-positioned for continued momentum. With inventory levels expanding, demand staying strong, and economic conditions holding steady, buyers are expected to have more opportunities to explore new construction homes in the months ahead.

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