What Would 50-Year Mortgages Mean for US Home Buyers?

The Trump Administration is working to introduce 50-year mortgages for home buyers—a plan that has drawn criticism even from some of the President’s allies, and that experts warn could come with potentially major drawbacks.

President Donald Trump suggested that his Administration would introduce 50-year mortgages in a Truth Social post over the weekend. Soon after, Federal Housing Finance Agency Director Bill Pulte posted on X: “Thanks to President Trump, we are indeed working on The 50 year Mortgage—a complete game changer.”

The 50-year mortgage would mark a significant extension on the most common type of mortgage in the U.S., a 30-year fixed mortgage, in which the loan is amortized—or paid off—over a 30-year period.

Several right-wing commentators and lawmakers were quick to voice opposition to the idea, which Rep. Marjorie Taylor Greene said in a post on X would “ultimately reward the banks, mortgage lenders. and home builders while people pay far more in interest over time and die before they ever pay off their home.”

The Trump Administration’s proposal also generated criticism from housing experts, who say that the benefits to home buyers would be minimal. Here’s what a 50-year mortgage would mean for prospective home buyers.

What are the benefits?

The monthly payments for a 50-year mortgage would be lower than those for a 30-year mortgage, according to Alex Schwartz, professor of urban policy at The New School. 

Imagine, for instance, that a person is purchasing a $500,000 home with a 30-year mortgage. The current average interest rate for a 30-year fixed mortgage is about 6.22%, according to Freddie Mac. That means if the home buyer put down a down payment of 20%, their monthly payment of the principal and interest would be $2,455, according to Fannie Mae’s mortgage calculator.

But if they took out a 50-year mortgage, again with a down payment of 20%, then their monthly payment of principal and interest—assuming that the interest rate is the same—would be $2,171, according to Fannie Mae. That’s a little under $300 less than the monthly payment for a 30-year mortgage.

“It’s a reduction, but it’s not dramatic,” Schwartz says of the difference between monthly payments for 30- and 50-year mortgages.

He also notes that the interest rate for a 50-year mortgage likely wouldn’t be the same as that for a 30-year mortgage, which could reduce the potential savings. A higher interest rate is just one of a few possible drawbacks to a 50-year mortgage, he says.

What are the drawbacks?

One drawback of a 50-year mortgage is that it would take home buyers longer to pay off their debt.

“If you were 30 years old and bought a home with a 30-year mortgage, it would be owned free and clear at age 60, so you’d only have to pay property taxes and maintenance on the home, no longer having to pay a mortgage during your older years or retirement,” Schwartz says. 

“If you were now paying a loan for a 50-year mortgage, and you’re 30, the mortgage wouldn’t end until you’re 80, and so you would have a period of time, most likely during retirement, where you have to pay the debt service costs on top of the property taxes and maintenance,” he continues.

The other issue, Schwartz says, is that homeowners wouldn’t build equity as quickly with a 50-year mortgage as they would with a 30-year mortgage. For the first several years of a mortgage, a homeowner is primarily paying interest; it takes several years before they actually start reducing their debt. Buyers with a 50-year mortgage would be paying down their debt much more slowly compared to a 30-year mortgage.

If housing prices go down, Schwartz fears that people with a 50-year mortgage may then have negative equity, meaning they would owe more on their mortgage than their home is worth.

Schwartz also says that, most likely, the interest rate for a 50-year mortgage would be higher than that of a 30-year mortgage. Currently, interest rates for 30-year mortgages are higher than those of 15-year mortgages.

“There are major trade-offs here,” Schwartz says. “Your monthly payment is somewhat reduced, [but] it will take a lot longer to build equity in your home, it would take longer to actually retire the mortgage so that when you’re older your housing affordability problems would be greater when you’re out of the workforce than they would be if you have a 30-year mortgage, and you are at greater risk of having negative equity.”

Would a 50-year mortgage help address housing affordability?

According to Schwartz, not in any significant way. For people who are “squeezed” on their current mortgage, if they chose to refinance for a 50-year mortgage, their monthly payments would become more affordable, Schwartz says. But he warns that a longer-term mortgage would carry significant risks.

“Is this going to make home ownership more accessible for first-time home buyers? I don’t think so,” he says.

Amid criticism over the proposal, Pulte acknowledged in a post on X, “We hear you. We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying. A 50 Year Mortgage is simply a potential weapon in a WIDE arsenal of solutions that we are developing right now. STAY TUNED!”

The President also responded to criticism over the idea. In an interview with Fox News, he said a 50-year mortgage is “not even a big deal.”

“All it means is you pay less per month,” Trump said. “You pay it over a longer period of time. It’s not like a big factor. It might help a little bit.”

Source: Time

How Trump Might Fix A ‘Housing Emergency’ in the US

There are no easy solutions to ease the housing affordability crisis, and some may run counter to President Trump’s other goals. 

The ballooning costs of buying a home have put homeownership out of reach for many Americans for quite some time, and last week the White House weighed in. “We may declare a national housing emergency in the fall,” Treasury Secretary Scott Bessent told the Washington Examiner in a Labor Day interview, but he provided scant detail beyond suggesting that the administration is looking at ways to standardize building codes and trim closing costs.

Some experts are concerned that such an emergency declaration would amount to an empty gesture. Although an affordability crisis is undoubtedly ongoing, there are no simple solutions, and many steps that could address the issue run counter to President Donald Trump’s other goals. “There are no shortcuts to answering this problem, because it took a long time to create,” says Andrew Wells, chief investment officer of investment management firm SanJac Alpha. “Either mortgage rates have to come down, or the cost of things associated with homeownership like insurance have to come down.” Of course, there is no guarantee that any patches are in the works.

Moreover, it “remains unclear exactly what kind of emergency measures the administration could take to address housing, or even if using emergency powers in this way is lawful,” notes Realtor.com senior economist Joel Berner. Assuming a declaration is issued, there are practical limitations on what the White House could do to address long-term affordability issues. Some of the president’s keystone policies, like tariffs and mass deportations, are contributing to housing costs, given increasing prices for things like lumber, steel, and labor. Although most of the market is focused on interest-rate cuts that Trump has demanded, which may come as early as this month, they won’t necessarily bring down mortgage rates.

After the last round of rate cuts in 2024, mortgage rates actually finished the year higher, as they (and long-dated Treasuries) take into account other data, including inflation and economic expectations. Likewise, Wells warns that if the government offers a tax rebate or subsidy, that only goes so far in helping Americans buy an “unaffordable asset, and you’re back to printing checks again,” like the pandemic-era stimulus checks that contributed to inflation and higher housing prices.

The housing bubble and subprime mortgage crisis helped kick off the 2008-09 global financial crisis, so there was a reluctance to build homes in the aftermath. However, some 20 million households have been formed since, and only 18 million homes have been built. There are some actions the president could try to increase supply, but these are likely to be met with resistance.

“Overriding, or at least standardizing, local laws on zoning would be a great step toward allowing builders to deliver the inventory needed,” says Berner. “Streamlining the permitting process and putting fewer restrictions on builders would be a great way to augment home inventory.”

That probably would boost builder stocks. The iShares US Home Construction exchange-traded fund is slightly trailing the S&P 500 index this year, although some builders, like D.R. Horton and PulteGroup, have surged more than 25%. Others, like Lennar and NVR, have lagged behind peers. Buddy Hughes, chairman of the National Association of Homebuilders trade group, also hopes deregulation will be part of any executive action, arguing for a “secure and affordable supply chain of building materials, and enacting policies that address a lack of skilled labor in construction.

A proactive agenda to bring down material, construction, and labor costs will also help.” The problem is that many high demand areas, like the Northeast, are likely to want to keep their local regulations for safety and environmental reasons—and blue states are more likely to challenge changes in court. Still, any well-reasoned action would be better than nothing.

According to the builders’ trade group, 75% of American households can’t afford a median-price new home. That means there could be ample public support to smooth the way for any popular policies that ease this crisis. Yet any lasting solution will necessarily be multipronged and take time to implement. No matter what happens, it seems as if the current house of cards can’t stand much longer 

Source: Barrons

A Shrinking US Housing Market Means Upheaval for Buyers

Companies like Compass, Rocket, and Zillow are trying to create one-stop shopping venues.

The housing market is barreling toward its third bad year of home sales. Once demand roars back, real estate transactions could look different for buyers, sellers, and investors. Anemic home sales are accelerating a housing market reconfiguration long in the making. In the coming years, it may be more common to purchase a home from one of the big public builders than a local developer, or secure a mortgage from the same portal you used when shopping for a home.

Big real estate companies are building digital platforms to keep more parts of the home purchase transaction under one roof—and taking business from real estate brokerages and mortgage lenders. “Anything that makes things easier for people—that’s where the world is moving,” says Tim Bodner, PwC’s real estate deals leader.

The fight for dominance recently spilled into the courts. Compass, the largest U.S. brokerage by sales volume, sued listings portal Zillow Group over new rules regarding listings that are initially viewable only by its agents and their clients. The lawsuit isn’t just a fight over wonky listing rules, but a conflict about the shape of the future housing market.

Consumers have been backing away from buying a home for several years. The number of existing homes sold fell to nearly 30-year lows in both 2023 and 2024. In the first five months of 2025, homes sold at an average seasonally adjusted annual rate of about 4.1 million, down from more than six million as recently as 2021, according to National Association of Realtors data.

The whole sector is under pressure until sales climb to at least five million, says Leo Pareja, CEO of brokerage eXp Realty. That’s far away: The Mortgage Bankers Association expects existing home sales to ramp up in the coming years but to remain below five million through 2027, as prices hold firm and mortgage rates remain above 6%. The path ahead for consumers will look increasingly streamlined—and is rife with both opportunities and risks.

Shifting Winds

 It isn’t just buyers and sellers backing out of the market. The National Association of Realtors, the industry’s largest trade group, is budgeting for its membership to decline to 1.2 million in 2026, from nearly 1.6 million as recently as 2022. That’s in part “due to the housing market’s current headwinds,” a NAR spokesperson says.

“There’s going to be sort of a reckoning” if sales remain slow, says Columbia Business School professor of real estate Stijn Van Nieuwerburgh. “Probably a bunch of people are going to quit this profession altogether.” Where some smaller brokerages see trouble, others see buying opportunities. Compass, a $3.2 billion real estate brokerage based in New York, grew its ranks of principal agents nearly 42% in this year’s first quarter from the year prior, largely because of its acquisitions. “Most brokerages are really struggling financially,” says Rory Golod, Compass’ president of growth and communications. “They don’t have the size, the scale, and sort of the balance sheet to get through this.”

Consolidation is coming to homebuilding, too. At a time when more builders are offering buyer incentives or slashing prices, the big players’ economies of scale allow them to keep costs lower. “In a slower and choppier market, mergers and acquisitions get more common,” says Ali Wolf, chief economist of real estate research firm Zonda. Publicly traded home builders comprised 52% of all new home sales in 2024, a larger share than anytime since at least 2005, Zonda data show. That could rise as high as 65% in the future, says Wolf.

Perhaps most emblematic of where housing is headed is the coming unification of Rocket, the nonbank lender best known for mortgage origination, with mortgage servicer Mr. Cooper and brokerage and home-listing portal Redfin. The three companies “realize that we are stronger together than we would be apart,” says Varun Krishna, Rocket’s CEO. The combined company will be the largest mortgage servicer and second largest lender in the U.S., according to Inside Mortgage Finance data. Redfin, meanwhile, gives them “the brand name and real estate brokerage that they never had before,” says Wedbush Securities analyst Jay McCanless.

Across categories, consumers now expect a more personalized experience, says David Steinbach, global chief investment officer of Hines, a real estate investment manager with $90 billion in assets. “That consumer taste for a better service, better outcome— which only data can do—means the scaled groups are going to win. The big are going to need to get bigger in order to better serve the needs.”

The Future

Companies that derive earnings from the homebuying process—such as listing portals, mortgage companies, and brokerages—have long looked for ways to capture a bigger slice of the pie in a fractured housing market. They may have finally settled on a recipe.

Zillow emerged from the 2021 failure of its volatile business buying and selling homes with a new plan: build a “housing super app” offering a range of housing services to buyers, sellers, renters, and agents in one place.

It hasn’t been a smooth ride. Zillow stock is down 5% this year, and 65%  below its pandemic high-water mark. But its push to integrate mortgages— whether through a mortgage marketplace or a lending arm of its own—into the buyer experience, along with investments in rentals and tools for agents, is finally paying off.

Zillow expects to be profitable under generally accepted accounting principles in 2025 for the first time since 2012. “The silver lining of a bad macro is it forces you to really be crisp about what’s working and what’s not working,” says Zillow CEO Jeremy Wacksman.

In the company’s super-app future, the homebuying transaction will never leave the company’s orbit. The whole process—shopping, hiring and communicating with an agent, talking to a loan officer, making an offer, getting a mortgage, and closing—will happen “in the palm of your hand inside an app like Zillow,”Wacksman says.

Across the spectrum, big players in real estate are envisioning what a less fractured housing transaction looks like. Buyers shopping with a Compass agent now have access to a dashboard to keep track of their communication, forms, to-dos, and referrals.

Realtor.com—a home-listings portal run by Move, which, like Barron’s, is owned by News Corp—sees an opportunity “to create an open marketplace, not just for real estate services, but for mortgage services and more,” says Move CEO Damian Eales. “This part of our business will evolve quite significantly in coming years.”

The Consumer

Mega-companies come with both opportunities and risks for consumers. Rocket, Zillow, and others see the opportunity to cut down on friction for buyers and sellers by uniting disparate parts of the housing ecosystem. “The more integrated the experience is, the easier it is to actually lower costs, and then pass on savings to the person who matters most, which is the consumer,” says Rocket’s Krishna.

That isn’t the way some left-leaning politicians see it. In a letter to the Department of Justice and the Federal Trade Commission, five senators including Elizabeth Warren (D., Mass.) and Bernie Sanders (I., Vt.) said that Rocket’s Redfin and Mr. Cooper deals “may reduce choice and raise prices for American families in the housing market” at a time when costs are already high.

“I couldn’t disagree more,” says Rocket’s Krishna.

No matter how a buyer purchases a home, it pays to consider the competition. Freddie Mac in 2023 said that borrowers who compared quotes from at least four mortgage companies stood to save as much as $1,200 a year compared with those who only sought one offer. “Sometimes the way these platforms work is they basically exploit impatient consumers,” says Columbia’s Van Nieuwerburgh. “It’s nice and it’s convenient, and they basically end up overpaying for that convenience.”

But bigger companies could also cut costs, particularly when it comes to home-building, says Van Nieuwerburgh. “There’s a huge number of very small construction firms that are frankly very inefficient,” he says. Deregulation efforts “could potentially lead to some much-needed consolidation,” resulting in more homes getting built—and more options for buyers.

As companies converge on similar visions of the user experience, they diverge on how it will be structured. Take private listings, for example: Advocates like Compass say sellers should be able to test the market before listing to the whole world, while critics like Zillow and eXp say such networks disadvantage buyers. The debate has split the industry down the middle, and is already changing the homebuying process. While Compass encourages sellers to list privately first, Zillow and Redfin have banned listings that aren’t immediately syndicated.

The industry’s evolution won’t stop with consolidation. “You finally have industry participants…all rethinking how things should work and criticizing existing processes that have been an afterthought for the past century,” says KBW analyst Ryan Tomasello.

Source: Barron's