The Trump administration’s budget plan for 2018 includes cuts to federal agencies that are so large, some economists say it would drive down federal employment and make a noticeable dent in housing prices in Washington, DC, Virginia and Maryland.
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But President Trump’s budget director, Mick Mulvaney, told reporters Wednesday that the budget wasn’t written to help prop up DC-area housing prices that have been the envy of other parts of the country for decades.
“The president of the United States, he represents the District of Columbia, northern Virginia and southern Maryland, but he also represents the rest of the country,” Mulvaney said on a call to outline the budget plan.
“And I can assure you that we did not write this budget with an eye toward what it would do to the value of your condo,” he said.
That was Mulvaney’s response when he was asked about reports warning of the budget’s possible downward effect on home prices. Just this week, the Washington Business Journal reported that Trump’s expected cuts to the federal workforce could cut DC-area home prices by almost 2 percent.
That analysis, from Mark Zandi of Moody’s Analytics, anticipated that the combination of reduced salaries in the area and fewer people coming to work in the area would undercut a market that has mostly been immune to any serious downsides because of the growth of government.
“He said the suburban areas of the D.C. marketplace will be hit the hardest,” the Journal reported. “He pointed toward the I-270 corridor, and to cities such as Gaithersburg, as potential areas that could see the biggest hits from a drop in the housing market.”
But Mulvaney seemed unfazed. Trump’s budget calls significant cuts to various federal agencies in order to help fund a $54 billion increase in defense spending.
That includes a “fairly dramatic reduction” at the State Department, he said.
