The Trump administration promotes a 50-year mortgage: Is it to help young people afford homes, or is it advocating for "leaving debt to future generations"?

The Trump administration in the United States is promoting a reform plan for the mortgage market, which will implement a 50-Year Fixed Interest Rate Mortgage (50-Year Mortgage). Officials believe that the plan will drop monthly payments and improve home purchasing difficulties for young people; however, critics warn that this could lead to further pump in housing prices and trap the new generation in a longer-term debt quagmire.

New White House Housing Policy: Trump Promotes 50-Year Mortgage

This initiative was announced by Bill Pulte, director of the Federal Housing Finance Agency (FHFA), who described it as “Trump's significant housing reform” that will fundamentally change the affordability of the American Dream. Trump also shared a comparison image on social media, likening himself to President Roosevelt, who promoted the “30-year mortgage,” aiming to evoke a political imagination of recreating the American Dream.

According to the Fotune calculation, taking a house price of 400,000 USD, an Intrerest Rate of 6.575%, and a down payment of 20% as an example:

30-year monthly payment is $2,788

The 40-year term is $2,640

50-year drop to $2,572

Although the monthly payment only drops by $216, the total long-term interest expense will increase significantly.

The housing market is trapped in the “lock-in effect”, with both buying interest and supply collapsing.

The mortgage interest rate in the United States has remained above 6% for three consecutive years, causing the market to enter an unprecedented “Lock-in Effect (Lock-in Effect).” Redfin data shows that American households need to allocate an average of 39% of their monthly income to repay mortgages, far exceeding historical affordability levels.

Many homeowners are reluctant to sell their houses because they hold low-interest loans from before 2022, leading to a sharp decrease in market supply and stagnant prices, making it increasingly difficult for young people to buy homes.

The National Association of Realtors ( NAR ) statistics show that the average age of first-time homebuyers in 2025 will reach 40 years, setting a new historical high.

Experts Warn: Low Monthly Payments May Lead First-Time Buyers to “Be in Debt for a Lifetime”

Economist Tyler Cowen pointed out: “While a 50-year mortgage can drop monthly payments, it will push up housing prices, slow asset accumulation, and increase the default risk in the financial system.”

Long-term loans not only cause total interest expenses to skyrocket but also significantly slow down the real appreciation rate of buyers' homes. If the market reverses, there is a risk of facing a situation where one spends a lifetime repaying debt without truly owning a house.

He emphasized that in the short term, the benefits of rising housing prices will be absorbed by existing homeowners and sellers, while first-time homebuyers are still excluded from the market.

(Cynthia Lummis promotes the cryptocurrency mortgage bill, allowing young people to apply for mortgages to buy homes using BTC)

Trump extends his hands towards the housing market? Fannie Mae and Freddie Mac plan to enter the equity market.

Bill Pulte recently revealed at a real estate conference that Fannie Mae ( and Freddie Mac ) may hold equity in private enterprises in the future in exchange for cooperation terms, similar to the “equity for subsidy” agreement previously reached by the government with Intel.

He bluntly stated: “We hold all the chips and will hold shares in the company in different forms in the future.”

Due to both companies still being under government regulation since the 2008 financial crisis, this statement has also sparked controversy over “the government's expansion of power through housing policies.”

Policy Intent and Potential Consequences: Reform or Signs of a Bubble?

In the short term, 50-year mortgages may provide young people with some breathing room and give the Trump administration political points on the “economic populism” level. However, in the long term, the hidden risks of driving up housing prices and expanding family debt cycles still exist.

Today, Trump's “American Dream” housing policy may still be paid for by the public.

This article discusses the Trump administration's implementation of 50-year mortgages: making it affordable for young people to buy houses, or promoting “leaving debt to future generations”? Originally appeared on Chain News ABMedia.