Dive Brief:

• The Trump administration’s tax proposal, announced last month, will impact some of homeownership’s financial advantages, according to Trulia. Most notably, the plan raises the standard deduction from $12,700 to $24,000, limiting the share of buyers eligible to claim the mortgage interest tax deduction.

• Homebuyers with incomes of $68,540 to $129,422 buying a home priced from $358,000 to $676,000 and obtaining a mortgage from $322,200 to $608,400 will be most affected. The percentage of household earners who will be able to itemize their mortgage interest will fall from 43% to 17%.

• Of homes for sale nationwide, roughly two in 10 are in the affected price range. Portland, OR, Denver and Sacramento, CA, have the largest share of affected listings, while Honolulu, Ventura County, CA, and the Twin Cities have the greatest share of affected households.

Dive Insight:

Raising the standard deduction risks leaving many members of an important segment of today’s housing market – young, first-time buyers – out in the cold by increasing the size of the loan they’d need to take out to claim the mortgage interest deduction. Meanwhile, most of the buyers in the range Trulia cited are candidates for the trade-up activity necessary to release more entry-level inventory that new buyers can afford.

Bloomberg reported that other elements of the tax plan, such as cutting local property-tax deductions, could hamstring home-sales activity in housing markets where home prices are rising quickly. Policy that lowers demand would have a negative effect on home values, the publication noted.

In 2016, 24- to 26-year-olds made up the largest segment of the U.S. population at 14.2 million people. In the first quarter of 2017, heads of household under 35 had a homeownership rate of 34.3%.

Availability of entry-level homes and general affordability challenges during the recovery has kept many potential first-time buyers off the market. The group accounted for 32% of buyers in 2015 and 35% in 2016, RCLCO reported. That’s down from a historical average of 40%.

Like the tax plan, President Donald Trump’s proposed 2018 budget has advantages and disadvantages for construction. Cuts to the Department of Transportation could impact road and rail projects, but a proposed – and highly disputed – U.S.–Mexico border wall would require significant investment in labor and materials from domestic companies. Still, the industry awaits more concrete details from the administration on the scope of an infrastructure spending program.