Why Trump’s 50-Year Mortgage Proposal Won’t Fix the U.S. Housing Crisis

Why Trump’s 50-Year Mortgage Proposal Won’t Fix the U.S. Housing Crisis

President Donald Trump’s proposal to let homebuyers choose 50-year mortgages over the traditional 30-year loans is a politically charged, but practically limited, response to the housing affordability problem. Reportedly approved after a brief conversation at a golf club with Federal Housing Finance Agency Director Bill Pulte, the idea is emblematic of a reactive policy approach: headline-ready, but unlikely to address the market’s root causes.

Longer loans don’t lower prices

Allowing buyers to extend repayment to 50 years does not reduce home prices. It simply spreads the same principal over a longer period. While monthly payments may be smaller initially, borrowers will pay substantially more interest overall because interest accrues for a longer time. Lenders are also likely to treat these loans as riskier and charge higher rates, further increasing total borrowing costs.

Administration policies have worsened supply-side pressures

At the same time, other administration policies have had the unintended effect of making housing scarcer and less affordable. Broad tariffs have raised the cost of many imported goods and inputs used in construction. The center-right Tax Foundation estimates tariffs have increased retail prices by roughly 5%, and some estimates suggest tariffs on construction materials may have added tens of billions of dollars to nationwide homebuilding costs.

Construction also depends heavily on immigrant labor. Immigrants make up nearly one-third of the construction workforce nationally and an even higher share in high-cost states such as California. Stricter immigration enforcement and deportation campaigns that have targeted day laborers reduce the available workforce at a time when builders are already short of workers.

Homebuilding operates on relatively thin profit margins. The National Association of Home Builders estimates an average net profit margin for developers around 8.7%—roughly in line with the overall economy—so higher material costs and labor shortages quickly erode incentives to build.

The real fixes are about supply, zoning, and approvals

The housing affordability crisis is fundamentally a mismatch between strong demand and constrained supply in major metro areas. Repealing tariffs or pausing aggressive deportations could ease some supply pressures, but meaningful progress requires federal and local action to expand the types of housing that can be built and to speed project approvals.

Specifically, reforming exclusionary zoning rules that limit density and housing types, and streamlining state and local permitting processes, would do more to increase supply and reduce prices than letting buyers stretch mortgages over 50 years.

Politics and policy

Ending exclusionary zoning and adding apartment buildings to single-family neighborhoods would encourage more racially and economically integrated suburbs—an outcome politically unpalatable to some parts of the MAGA base. By contrast, the Biden administration and a bipartisan coalition have moved on federal housing initiatives, including the ROAD to Housing Act, which bundles a range of supply- and demand-side measures and recently passed the Senate.

Promoting 50-year mortgages is likely to be more symbolic than substantive. Without changes to zoning and approvals, the underlying shortage of homes will persist.

Originally published on MSNBC.com.