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Increased mortgage rates, the tax law enacted in December, and a supply-demand imbalance look to be the three areas that will most define the U.S. housing market this spring, The New York Times reports.

The housing market will depend on which opposing force proves more powerful: long-term fundamentals of supply and demand, or near-term ripples emanating from Washington and Wall Street.

Most evidence suggests that fundamentals will prevail over time and push sales and prices higher, especially at the lower and middle tiers of the market. But the opposing forces could mean a period of uncertain dealmaking. Higher mortgage rates and a new tax law will affect several elements of home buying.

The average rate on a 30-year, fixed-rate mortgage increased from 3.78% in mid-September to 4.45% in its latest reading, NY Times reports. Meanwhile, the 2018 tax law reins in some of the past U.S subsidization of homeownership by lowering the cap on mortgage interest deductions, among other measures. The housing shortage continues while a growing number of millennials enter the market.

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