Trump suggested the 50-year mortgage as a cure for the affordability crisis.

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Trump suggested the 50-year mortgage as a cure for the affordability crisis.

Trump suggested the 50-year mortgage as a cure for the affordability crisis.

We have the 5-year, 7-year, 10-year, 15-year, 20-year, and 30-year mortgages. Let’s add the 40-year and 50-year mortgages as options. This is America – we are used to having lots of options!

Let’s also have EVERY applicant be required to pass a class in finance/mortgage management too.

The 50-year mortgage is getting bashed as irresponsible and favoring the bankers, which it does. But so do many other things – you could make the argument to ban legalized gambling, $200 jeans, and avocado toast so young people could better afford a home.

But the 50-year mortgage only lowers the monthly payment by 12%, which doesn’t provide enough relief for everyone to choose it. It would be a sweetener at best and barely move the affordability needle.

This is the real affordability game-changer – if only we can get it passed. The ensuing panic among sellers would be good for an immediate 5% to 10% decline in home prices, and a lingering effect over the next 10-20 years as the boomer generation clears out.

Combined with more loan choices and lower rates, we’d get some actual relief:

Make the existing mortgages assumable and we’d really be getting somewhere:

We used to have many more home sales: