Changes in federal tax laws passed by the Republican-controlled Congress in late 2017 and signed by President Donald Trump could be to blame for depressing home sales in 2018, according to research from the Federal Reserve Bank of New York.

There is “circumstantial evidence” supporting the idea that that certain parts of the tax overhaul, like a $10,000 cap on state and local tax deductions, a lower limit on the amount of mortgage debt on which interest is deductible and lower marginal tax rates have put a drag on the housing market nationwide, particularly at the high end of the market, New York Fed Vice President Richard Peach and Senior Research Analyst Casey McQuillan found.

From the fourth quarter of 2017 to third quarter of 2018, sales of new single-family homes declined by 7.6 percent while sales of existing single-family homes fell by 4.6 percent, Peach and McQuillan reported. These declines in home sales were larger than in the two previous episodes when mortgage interest rates rose by a comparable amount, the report stated. In the Northeast, home sales dropped by 28 percent over the same period, with the biggest decline hitting homes between $200,000 and $300,000. Sales of homes costing more than $500,000 fell during that period by 26 percent.