In the short term, Midwest homeowners also will fare better than others around the country, Swonk said in her monthly First Forecast newsletter, which features a special focus on housing.
More buyers remain willing to buy.
More first-time buyers can afford to buy. And more homeowners can still afford to trade up. That equity also would enable Midwest homeowners to cash in if the capital gains tax on housing is changed. Current law requires home sellers to pay tax on the gain unless they purchase a home of equal or greater value, which would allow them to delay the tax. Over the long term, however, the change could keep home prices lower, Swonk said.