WASHINGTON–The Trump administration is reportedly working on a plan to introduce mortgages with 50-year terms as a means of making homeownership more affordable, but there has been almost immediate pushback from many who said the half-century term will not help consumers.
“Thanks to President Trump, we are indeed working on The 50 year Mortgage – a complete game changer,” Federal Housing Finance Agency (FHFA) Director Bill Pulte wrote in a statement on the social platform X.
It followed a Truth Social post by President Trump earlier in the day where he shared a graphic juxtaposing an image of him next to one of former President Franklin D. Roosevelt. The administration that oversaw the New Deal established the 30-year mortgage standard to help citizens recover from the Great Depression.
What Google Searches Reveal
The Hill noted that Google searches for “help with mortgage” recently climbed to their highest level since 2009, while adjustable-rate mortgages, or ARMs, have also been trending, as the CU Daily reported earlier. ARMs made up about 10% of all mortgage applications in September — the highest share in nearly two years and well above the post-2008 average of 6 percent, according to the Mortgage Bankers Association (MBA).
Newsweek noted that home ownership has emerged as a key issues in the U.S., with many people struggling to get on the housing ladder. The average age of first-time homebuyers had reached an all-time high of 40, according to a recent report by the National Association of Realtors.
Responses to Proposal
The announcement of the 50-year term attracted a number of criticisms, with many pointing out that a longer fixed-rate mortgage would lower monthly payments, but would create a higher total cost because of interest.
- Rep. Marjorie Taylor Greene (R-GA)wrote, in part: “I don’t like 50-year mortgages as the solution to the housing affordability crisis. It will ultimately reward the banks, mortgage lenders and homebuilders while people pay far more in interest over time and die before they ever pay off their home. In debt forever, in debt for life!”
- Added Maggie Anders, who works for the conservative libertarian think tank the Foundation for Economic Education, in a statement to Newsweek: “Young Americans don’t want to be debt slaves for the rest of their lives. We want cheaper houses, which can only be accomplished by increasing the supply through deregulation.”
- Graham Stephan, a real estate investor and commentator with over 199,000 followers wrote: “A 50-Year mortgage would allow you to buy approximately 10% more house (or save about 10%) at the expense of nearly DOUBLING your payment schedule. There’s no way that ends well,” Newsweek reported.
- HousingWire lead analyst Logan Mohtashami wrote: “I understand that we have housing affordability challenges in America, but subsidizing more demand from 30- to 50-year mortgages is not the policy we want to take now. Housing has to balance itself out through slowing home-price growth and wages increasing—as it has for many decades. To add another subsidization to the market just prevents that healing process from occurring, which also prevents less equity build out as well. So, I am not a fan of any increasing in the amortization, the 30-year fixed is perfectly fine as is.”
