Would you like to pay $2 million for a run-down property? Welcome to the current state of the US housing market. In many areas with strong job opportunities, homes have become increasingly unaffordable. One major factor is the quantitative easing measures during the pandemic, which fuelled housing inflation. According to Redfin, the median US home price in January was $418,000, up roughly 45% from $289,000 five years ago. Wages, however, haven’t kept pace, meaning the ratio of house prices to income is at an all-time high.
Post-pandemic America can be split into three groups of homeowners. First, those who bought a house before the pandemic or own their home outright and may have refinanced during the historic low-interest period of 2020–21. Many of these individuals now hold substantial equity in their properties.
Second are those who purchased their first home during the pandemic. They also benefited from historically low mortgage rates. Although not as fortunate as the first group, having a 30-year mortgage below the current inflation rate—around 3%—puts them in a relatively privileged financial position.
The third group is facing the toughest situation. Unless someone earns a high income, receives family support, or is willing to live far from major cities, buying a first home today is a steep challenge. Nearly a quarter of millennials expect to rent indefinitely. Prices are historically high, and average mortgage rates are around 6.3%, compared to the 2–3% rates some buyers locked in during the pandemic. For example, a $500,000 home with a 6.3% mortgage costs about $900 more per month than one with a 2.5% rate.
The situation could worsen further. Proposed tariffs, such as a 50% tax on steel, threaten to raise the cost of building and renovating homes, adding to affordability pressures.
Enter Donald Trump with his latest housing proposal: 50-year mortgages. The idea was reportedly suggested by Bill Pulte, director of the Federal Housing Finance Agency, who described it as a “gamechanger.” Critics, however, have been quick to question the practicality of such a long-term loan.
Even some of Trump’s own allies were reportedly shocked by the concept. Politico reported that the White House was frustrated that Pulte had introduced the idea to Trump. According to insiders, the pushback was unprecedented, rivalled only by controversies like the “Epstein Files” in Trump’s previous term.
The issue with a 50-year mortgage is that it doesn’t address the underlying housing problems. While monthly payments would be lower, equity would build more slowly, and total interest payments would be much higher than with a standard 30-year mortgage. There’s also a risk that housing prices could rise further, as buyers might take on more expensive homes, knowing the payments are stretched over five decades.
For those outside the US, even a 30-year fixed mortgage may seem unusual. In most countries, mortgages are short-term and adjust periodically with interest rates. The 30-year mortgage system in the US originated with President Franklin D. Roosevelt after the Great Depression, aiming to make homeownership more predictable and reduce default risk.
Trump has compared his 50-year mortgage idea to Roosevelt’s 30-year plan, even posting a graphic on Truth Social showing himself alongside Roosevelt. While 30-year mortgages have helped many homeowners, they have also contributed to inequality. Those with low rates are shielded from market fluctuations, which can freeze the housing market and reduce affordability for new buyers. Extending this to 50 years could worsen the problem.
It remains uncertain whether the 50-year mortgage idea will progress beyond social media speculation. However, the discussion highlights a tendency towards short-term political solutions rather than addressing structural issues in the housing market.
Trump has similarly floated other quick-fix proposals, such as sending Americans rebate checks tied to tariffs or paying for health insurance. While these ideas might offer temporary relief, they risk driving prices higher over time and don’t tackle the root causes of financial strain.
The broader takeaway is that flashy, headline-grabbing proposals often fail to solve long-term problems. Housing affordability is a complex issue, requiring thoughtful policy, not just extended mortgage timelines or temporary cash payments.
Perhaps the simplest solution is less political spectacle: addressing the root causes of housing scarcity, controlling construction costs, and creating policies that support sustainable homeownership. For those following US housing politics, Trump’s 50-year mortgage is a reminder that short-term fixes rarely solve enduring problems.
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