Ahead of President Trump’s first State of the Union address, analysts at Realtor.com reviewed the state of the U.S. real estate market in 2018.
Rising home prices and declining inventory remains the trend, affecting a generation of millennial would-be-buyers who can’t find appropriate housing. The newest changes facing the market are the effects of the tax legislation passed by Congress in late 2017. Both challenges could affect Republican and Democratic areas of the country in different ways.
Densely built urban and suburban areas on the coasts and states like Illinois, which tend to vote blue, have higher sales price growth (9.1 percent) than red states (5.9 percent), which tend to be more rural. In addition, the new tax law eliminates interest deductions on mortgages over $750,000, affecting 2.5 percent of mortgages in blue states and only 0.4 percent of mortgages in red states.
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