Trump‘s 50-Year Mortgage Plan Faces Scrutiny Amid Inflation Concerns
CHEYENNE, WYOMING – November 16, 2023 – Former President Donald Trump’s proposal for 50-year mortgages is sparking debate among housing experts and lawmakers, with critics questioning whether the plan addresses the core issues driving the nation’s affordability crisis. The proposal, aimed at easing the financial burden of homeownership, is gaining traction as housing prices remain stubbornly high despite rising interest rates.
The idea centers on extending mortgage terms too significantly lower monthly payments, theoretically opening homeownership to a wider range of buyers. However, analysts warn that such a move could artificially inflate housing values and fail to tackle the essential problem of limited housing supply and a devaluing U.S. dollar. The plan would likely require Congressional action, facing potential roadblocks given recent government shutdowns and bipartisan skepticism.
According to proponents like Ryan Pedersen, the rise in home values is directly linked to monetary policy. “one major reason my house value went up is because we printed a bunch of dollars in 2020 and devalued the U.S. dollar,” Pedersen said. “All of this inflation is from printing dollars to justify leaving people at home and bailing out companies during the lockdown.” He argues that increased money supply diminishes the value of each dollar, driving up the cost of assets like homes.
However, experts like Chad Jenkins contend that extending mortgage terms doesn’t address the underlying market dynamics.”We look to a free market to try and keep prices in check, between just supply and demand,” Jenkins said. “But when you extend a mortgage to 50 years in an effort to enable buyers to afford today’s prices, it’s not allowing the market to do what it needs to do and be responsive to the fact that it’s…it’s pricing that is outpacing demand.”
Existing federal laws currently prohibit 50-year mortgages, necessitating an Act of Congress for implementation. Both Democrats and Republicans have voiced concerns, arguing the plan is a superficial fix. Pedersen echoed this sentiment, stating, “Really the only way to get the devaluation is for them to address our debt. And I have little faith in our government to do so. But that is the path. It’s the same for all of us. if you are over-leveraged you become a bad investment, and the U.S. is over-leveraged, so our dollar has devalued.”
The debate highlights the complex challenges facing the housing market and the search for effective solutions to make homeownership more accessible.
