Four Reasons Why Trump's '50 Year Mortgage' Proposal Is Bad Policy

The Weekly Recap

Good morning, happy Friday! The government shutdown has come to an end, the Fed is continuing to discussing cut rates again in December, we may not see the October CPI due to the shutdown. The $2000 tariff dividend may show itself as a tax cut rather than a check in the mail, CEO’s have no worries on the future of the economy, the last penny to ever be was minted in Philadelphia this week and here is a sentence I never thought I would type, but Cheetos are going naked.

If you missed last weeks newsletter on Why I Am Not Worried About NY Politics Shaking the Real Estate Market, you can read that through the link.

Four Reasons Why Trump’s “50 Year Mortgage” Proposal Is Bad Policy

Every few years, as affordability pressures mount, a new idea re-emerges in the housing market: extend the mortgage term. The latest iteration is the 50-year mortgage as a potential fix to today’s pricing and interest rate challenges.

At first glance, stretching payments over five decades sounds like a creative way to make homes more “affordable.” But when you dive deeper it becomes clear that a 50-year mortgage doesn’t solve the affordability problem, it only delays it.

Here are four reasons why:

You Don’t Fix Prices By Stretching Time

Housing affordability is a function of price, income, and interest rate…not term length.
Extending a mortgage from 30 to 50 years only lowers the monthly payment marginally, while keeping total debt and prices elevated. This creates the illusion of affordability without addressing the root cause: that home prices have grown far faster than wages and that demand continues to outpace available supply.

Worse yet, this strategy often fuels further price inflation, as buyers can “afford” more on paper, pushing prices even higher for the next generation of buyers.

It Magnifies Total Interest Payments and Delays Equity Growth

A 50-year loan dramatically increases the total interest paid over the life of the loan.
On a $1 million mortgage at 6.5%, a 30-year loan results in roughly $1.27 million in interest, while a 50-year loan balloons that to over $2 million.

That means buyers spend two decades longer paying mostly interest, with little equity growth, leaving homeowners more exposed to market corrections and far slower to build wealth.

It Extends Financial Risk

A 50-year mortgage is not a financial plan, it’s a multi-generational liability. Few people will live in their homes for 50 years, meaning most will sell before the loan is halfway paid. If prices stagnate or dip, many borrowers could end up underwater for a longer period, limiting mobility and locking families into homes they can’t easily sell.

This isn’t sustainable housing policy, it’s kicking the can down the road and placing long-term risk on future homeowners and taxpayers.

It Distracts From Affordability Solutions

Affordability won’t be solved by tweaking mortgage math, it will be solved by addressing supply, zoning, and wage growth. We need more housing units built in the right locations, faster permitting, and incentive structures for developers to create entry-level and workforce housing. A longer mortgage term does none of this. It’s a temporary patch that risks masking the systemic imbalance between supply and demand.

The 50-year mortgage is not innovation, it’s an illusion. While it may ease monthly payments in the short term, it deepens long-term debt, inflates prices, and defers the very affordability crisis it claims to fix.

Real solutions come from building smarter, zoning better, and aligning policy with production, not from stretching financial products to generational lengths.

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of NYC market activity over the past week.

Mortgage Rate Update

This week the 30-year fixed-rate mortgage averaged 6.24% remaining essentially flat week over week. On a median-priced home, this could allow a homebuyer to save thousands annually compared to earlier this year, showing that affordability is slowly improving. Purchase activity also increased this week which is encouraging.

News You Can Use

• US Fed Governor Miran Says Half-Point Cut ‘Appropriate’ For December CNBC

• Fed Policymakers Divided Over Need for More Rate Cuts Reuters

• Trump Signs Funding Bill, Ends Government Shutdown

• CEO’s Sound Least Worried About An Economic Slowdown Since 2007 Bloomberg

• Warren Buffet Says He Is Going Quiet As He Prepares to Stepdown from Berkshire Hathaway NY Post

• New York City Set to See Rise in 99-Unit Apartment Towers Bloomberg

• Housing Director Confirms Administration Working In 50-Year Mortgage After Trump Hint The Hill

• UBS Says 50 Year Mortgage Would Double Interest Costs Over Time Bloomberg

• October Jobs, CPI Reports Unlikely to Be Released Due to Shutdown Bloomberg

• Millennials Are Piling Into Alternative Assets. Here’s Where They’re Investing CNBC

• Bessent Says Trump’s $2,000 ‘Dividend’ May Come Via Tax Cuts Bloomberg

• The Last Ever Penny Is Being Minted in Philadelphia Axios

• Cheetos Are Going Naked Bloomberg

The Deep Insight

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