Harriet Lee-Merrion

Taking the step to buy your first home may feel like a leap — across a canyon. You will probably be spending more money at once than you have ever spent in your life, and committing to spend even more money that you don’t have, all while becoming responsible for something that won’t necessarily love you back.

To make matters worse, 2018 presents a new set of problems for rookie home buyers: a new tax law whose full effects have yet to be felt on homeowner taxes or property values; record low inventory; tough credit; and rising mortgage rates.

So should you make that leap?

What Will the New Tax Law Do to Home Values?

How the new Republican tax plan approved late last year will affect housing isn’t completely clear yet, but buying a home in 2018 will likely become more expensive, especially for buyers who live in high-tax states. Taxpayers used to be able to deduct all of their state and local taxes, including property taxes, state income taxes and city income taxes, from their federal taxes. Now those deductions are capped at $10,000 — and at $5,000 for married taxpayers filing separately.

In New Jersey, for example, the average 2017 property tax bill was $8,690 across the state, according to the New Jersey Department of Community Affairs, and more than $11,000 in counties that make up the suburbs of New York City. Those homeowners are likely to blow past the new deduction cap before they’re even done with their property taxes.

At the same time, the standard deduction has been raised to $12,000 for single filers and married people filing separately, $18,000 for a head of household and $24,000 for married couples filing jointly. So in 2018, it may make more sense for taxpayers to take the standard deduction instead of itemizing and taking the state and local tax deduction.

Harriet Lee-Merrion

For taxpayers who decide to continue itemizing instead of taking the higher standard deduction, the cap on how much of those taxes can be deducted will no doubt hurt, said Sheila Brandenberg, a C.P.A. who serves on the personal finance planning committee for the New York State Society of C.P.A.s. “For most of my clients, those two numbers were over $10,000 when you added them together. They’re losing that benefit,” she said.

And tax changes affecting mortgages are also likely to hurt first-time home buyers — or any of us who can’t afford to buy a home with cash. That’s because the tax law cut the deduction for mortgage insurance premiums, those monthly payments tacked onto most mortgages when the buyer makes less than a 20 percent down payment.

The mortgage interest deduction has also been lowered: mortgage holders could previously deduct mortgage interest on up to $1 million of a mortgage. For 2018, that has been lowered to $750,000 (or $375,000 for married taxpayers filing separately).

“The tax laws used to have a heavy tax incentive skewing the decision-making process in favor of homeownership. It’s been largely eliminated, in my opinion,” said Stephen M. Breitstone, partner and chair of the Private Wealth and Taxation Group at Meltzer, Lippe, Goldstein & Breitstone.

Most parts of the new tax law, including the state and local tax deduction cap and the new mortgage interest deduction limit, are set to expire in seven years. B ut “it’s almost impossible to predict,” Mr. Breitstone said, whether or not that will actually happen. “We just don’t know what the economy will be, what the state of deficits will be.”

How all of this will eventually affect potential buyers’ attitudes — and therefore home values — is unclear. “We’re going to have a year or two or three of price discovery,” said Jonathan Miller, president of the real estate appraisal firm Miller Samuel.

Is There Anything to Buy?

Even for those ready to buy, historically low inventory around the country, especially in the entry and midpriced levels of the market, is raising prices for what is available, said Lawrence Yun, chief economist…