Trump’s 50-Year Mortgage Idea Sparks Warning From Economists
Economists are cautioning that President Donald Trump’s proposal to lower monthly mortgage payments could leave many Americans carrying far more debt over time, offering short-term savings that may come with a long-term financial cost.
Over the weekend, Trump suggested on Truth Social that the government could introduce a 50-year mortgage option. Bill Pulte, the director of the Federal Housing Finance Agency — which regulates Fannie Mae and Freddie Mac — confirmed in his own post that the administration is “indeed working on” the idea, calling it “a complete game changer.”
Trump has framed the plan as a way to make it easier for Americans to buy homes. But many economists say the proposal does not address the underlying causes of the nation’s housing affordability crisis.
Bryan Caplan, a professor of economics at George Mason University, said the real issue is that the country simply does not have enough available housing.
“While it might be a helpful product for some consumers, it will make housing even more unaffordable by further pumping up demand,” Caplan told Fox News Digital. “If we don’t build more houses, they will stay expensive.”
Joseph Gyourko, a real estate and finance professor at the Wharton School of the University of Pennsylvania, echoed that view, saying the main obstacle is how difficult it is to develop new housing.
“The problem is the lack of supply and the lack of supply is due to regulation, which is a way of saying it’s just easy to stop development in the United States,” Gyourko said. “The longer-run problem is the lack of new building of homes.”
E.J. Antoni, chief economist at the Heritage Foundation, said the administration is right to focus on affordability, but argued the solution is still on the supply side.
“President Trump should be commended for trying to address the home affordability crisis created under his predecessor,” Antoni said. “But the problem does not stem from a lack of long-term financing options. Instead, it’s a fundamental mismatch between supply and demand.”
Antoni said that to bring prices down meaningfully, the federal government would need to ease construction costs and reduce barriers to development.
“The best way to thaw this frozen housing market,” he said, is to reduce government spending to ease pressure on interest rates and roll back burdensome regulations so more homes can be built.
Even if more homes become available, analysts warn that stretching mortgage payments over 50 years could cost buyers significantly more across the life of the loan.
Joel Berner, senior economist at Realtor.com, said any short-term relief may be overshadowed by the total cost over time.
“The drawbacks are that a 50-year mortgage results in almost double the interest payments of a 30-year mortgage and a longer path to meaningful home equity, and that the result of subsidizing home demand without increasing home supply could be an increase to home prices that negates the potential savings,” Berner said.
He offered an example: borrowing the same amount at a 6.25% interest rate would result in roughly $438,000 in interest payments over 30 years. Under a 50-year term, that total would rise to about $816,000.
Though monthly payments would be lower, Berner noted that spreading them over two additional decades means borrowers would ultimately pay far more to own the same property.
