House Prices: Tax Cuts To Offset Spike In Mortgage Rates, Goldman Says
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]