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Trump is pushing 50-year mortgages. Talk about short-term thinking | Arwa Mahdawi

Would you like to buy a crumbling shack for $2m dollars? Well then, you’re in luck, because that just about sums up the state of the housing market right now. Housing, particularly in places with a decent job market, has become increasingly unaffordable in the US. That’s partly thanks to quantitative easing during the pandemic, which supercharged housing inflation. The median American home price in January was $418,000, about a 45% increase from $289,000 five years ago, per Redfin data. Wages haven’t gone up at the same rate, and housing prices compared to income have reached an all-time high.

In post-pandemic America, there are three groups of people. First, there are those who own their home outright and those who bought a house before the pandemic, then refinanced during the historically low interest rates we saw in 2020 and 2021. Many of those homeowners are now sitting on large piles of equity.

Then you’ve got the people who bought their first home during the pandemic, with super-low interest rates. They’re not quite as fortunate as group one, but having a 30-year-mortgage that is under the rate of inflation (currently around 3%) means they’re also in a very privileged position.

Finally, you’ve got group three: people who are completely and utterly screwed. Unless you’re earning big bucks, have generous parents, or want to live in the middle of nowhere, good luck buying a first home right now. Indeed, nearly a quarter of millennials say they expect to rent forever. Prices are historically high and mortgage rates, while still far lower than they’ve been in the past, are around 6.3%. The difference between buying a $500,000 home with a 6.3% mortgage v a 2.5% interest rate (which some lucky people got during the pandemic) is about $900 a month. And things will only get worse; Trump’s tariffs, including a 50% tariff on steel, could raise the cost of building and renovating a home.

But don’t worry. You’re not going to have to rent a $700 sleeping pod (yes, these are a thing in San Francisco) for the rest of your life. Our great president is on it. Donald Trump has a plan – or perhaps more accurately, “concepts of a plan” – to fix housing affordability: 50-year mortgages. Federal Housing Finance Agency director Bill Pulte, who reportedly promoted this genius idea to Trump, called the proposal “a complete game changer”. You know what else is a complete game-changer, Bill? Jumping in a pile of toxic waste.

Even many of Trump’s allies are said to be aghast at the idea of a 50-year-mortgage. This week, Politico reported that the White House is furious Pulte planted the idea in Trump’s head. Per Politico, “one of the two people familiar [with the situation] said there is more fallout from this idea than almost any other policy proposal of the second term, including from the MAGA base.” Another source told Politico: “During Trump 2.0, the last time anything got as much pushback as this was over the ‘Epstein Files’.”

The problem with a 50-year-mortgage, to be clear, is that it does nothing to solve the root issues. Yes, you’ll have a lower monthly payment since the timeline is longer, but it’ll take you longer to build equity and you’ll pay double the amount of interest as someone with a 30-year-mortgage, according to one analysis. Fifty-year-mortgages could also increase housing prices in the long run by encouraging people to buy more expensive homes.

If you’re reading this from somewhere that isn’t the US, even the idea of a 30-year-mortgage might seem odd. The US is an outlier when it comes to mortgages. In most countries you can only get a fixed-rate for a few years before it adjusts according to current interest rates.

President Franklin D Roosevelt helped usher in 30-year-mortgages after the Great Depression, when about 50% of mortgages, which were then only fixed for a short term, were in default. The Roosevelt administration wanted to ensure this didn’t happen again in the future by helping people become homeowners via more predictable repayment plans with reduced risk. Trump, it would seem, fancies himself another Roosevelt. Over the weekend he floated his new housing idea with a Truth Social post titled “Great American Presidents”, which included the words “50-year mortgage” above a photo of himself and “30-year mortgage” over a photo of Roosevelt.

Thirty-year-mortgages have worked out very well for a lot of individual homeowners in the US. However, many experts believe they exacerbate inequality by creating a system of winners and losers. Lock in a low interest rate for 30 years and you are, to a large degree, insulated from many economic headwinds. If you’ve got a low interest rate, it’s also hard to give it up when rates are rising. That means people who might otherwise downsize will stay in place. Or they might rent out a house they’d normally sell in order to keep their interest rate. Long-term fixed rate loans help contribute to a frozen housing market, which helps erode housing affordability. A 50-year-mortgage would make these issues even worse.

It’s unclear whether the 50-year-mortgage idea will ever progress to more than just a social media post. However, the fact that we’re even discussing it says a lot about the short-term thinking that plagues modern politics. And it speaks volumes about Trump’s focus on flashy bandages rather than long-term solutions.

You can see all the same issues, for example, in Trump’s recent plan to send Americans tariff rebate checks. “People that are against Tariffs are FOOLS!” Trump posted on Truth Social on Sunday. “A dividend of at least $2000 a person (not including high income people!) will be paid to everyone.” Like 50-year-mortgages, this would be a quick fix that might give people some immediate relief while exacerbating higher prices in the long term. Trump has also brainstormed sending Americans money to help with health insurance rather than doing anything substantial to fix the US’s broken health care system. Turns out that electing a showman whose companies have filed for bankruptcies multiple times might not have been the best idea.

Anyway, since hare-brained ideas seem to be all the rage in American politics right now, let me take the opportunity to introduce my own plan to increase housing affordability: we kick Trump out of the White House and we turn it into condos.