Would a 50-year mortgage make home ownership attainable?

The American dream feels increasingly out of reach. The average age of first-time home buyers is now 40, and home prices have skyrocketed for years. President Donald Trump is offering a purported solution: The 50-year mortgage.

Trump’s proposal “could meaningfully reshape a housing market where 30 years is the norm,” said CBS News. The extended term is a “potential weapon” for “ensuring the American Dream,” said Federal Housing Finance Agency Director Bill Pulte. Spreading house payments out over a half-century would offer buyers “lower monthly payments” but with the significant downside of a “dramatic increase in the total cost of the loan” thanks to interest payments, said CBS. Homebuyers would also “build equity far more slowly than those with shorter loans.” There are skeptics across the political spectrum. Fifty-year mortgages are “not the best way to solve housing affordability,” said Joel Berner, senior economist at Realtor.com.

What did the commentators say?

“The idea is ridiculous,” said Michael Tomasky at The New Republic. Thirty-year mortgages let “typical homeowners” pay off their loans “by the time they’re in their mid to late sixties.” That, in turn, lets those owners use the rising value of their homes as a “nest egg” for retirement. Extending those payments by 20 years would erase that advantage. “Could you imagine having to make mortgage payments until age 85?”

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A 50-year mortgage “isn’t the worst idea ever,” said Jonathan Lansner at The Orange County Register. “Few borrowers” hold onto 30-year mortgages for their full terms, either refinancing them or paying the loan off early. There is “no reason” to think longer-term loans would behave differently. If that is the case, “why shouldn’t a buyer grab a few years of savings?” Those savings could amount to a “few hundred bucks” monthly for most buyers. “That’s real money to new homeowners.”

One downside is that homeowners who sell before paying off their mortgages “will get less of the home’s value” under a 50-year loan, said Allison Schrager at Bloomberg. That seems to be a likely issue, because most owners “only live in their homes for less than 20 years.” But the tradeoff — lower payments now, lower return later — may be “worthwhile” for “someone who needs or wants a lower monthly payment.”

What next?

The share of first-time home buyers has dropped to a “record low” of 21% of all home purchases, said The National Association of Realtors. That reflects a housing market “starved for affordable inventory,” said NAR’s Jessica Lautz. That means today’s buyers are “building less housing wealth and will likely have fewer moves over a lifetime as a result."

Where Trump’s proposal goes next is unclear. Right-wing Influencers, including Laura Loomer, Mike Cernovich, Christopher Rufo, Sean Davis and Rep. Marjorie Taylor Greene (R-Ga.), “blasted the idea” as “bad politics and bad policy” that could “raise housing costs in the long run,” said Politico. The president remains committed to making it “easier and more affordable” to buy a home, said a White House spokesperson.