House Prices: Tax Cuts To Offset Spike In Mortgage Rates, Goldman Says
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Restrictive immigration rules and rising mortgage rates stand to hurt housing prices, but new research from Goldman Sachs suggests tax cuts could help.
Tax cuts are what President-elect Donald Trump wants, and Goldman’s research predicts they will result in a $200B boost to after-tax personal income along with a five-point drop in the average marginal tax rate for Americans with mortgages, MarketWatch reports. Overall, the report predicts tax cuts will increase home prices by 0.9%.
That’s the good news—the bad news is borrowing costs are projected to rise, hurting house prices by 0.6%, and slower population growth due to stricter immigration rules could push prices down even further. [MW]