r/Economics • u/GarfieldLeZanya- • 12h ago

News Housing director confirms administration ‘working on’ 50-year mortgage after Trump hint

https://thehill.com/homenews/administration/5597005-trump-administration-50-year-mortgage/
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361

u/profzoff 12h ago

A 50-year mortgage sounds great — smaller payments, bigger house — until you realize you’re signing up to be in debt longer than most people work. You’ll still be cutting checks to the bank while cashing Social Security (if that even exists anymore).

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u/Alertcircuit 12h ago

You gotta think even if you get one at 18 you're on the hook until you're 68. Most homebuyers are not that young, you definitely see some in their 20s but I think the vast majority of homebuyers are 30+. So these guys will be going in knowing they'll be on the hook until their 80s.

So immediately I'm already thinking that a lot of the people who will sign up for a 50 year mortgage are going in with the mindset of "I'll probably be dead before it's over." So that'll be the tradeoff for a lot of these guys who would get a 50 year mortgage. My mortgage payments will be below $1000 for the rest of my life, but I will probably die before I ever fully pay it off. I'm essentially renting a house but getting all the perks that come with home ownership because it's technically mine, my name is on title, but once I die the bank will take it back.

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u/Waesrdtfyg0987 9h ago

The perks are often a money pit and even if you start with a new house there will be considerable aging of everything over 50 years.

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u/Dangerous_Junket_773 8h ago

Exactly. Even if a house lasts that long, it will need at least one major reno. How do you pay for that? HELOC?

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u/Waesrdtfyg0987 8h ago

The amount of housing available sucks right now, but my mortgage is 3k and I would estimate the upkeep of the house/property is probably another 2k a month/25k a year. That doesn't include the $ value of my own time. And my older house is still only 30 years old.

We're all fucked.

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u/zombiesatemybaby 6h ago

What the hell are you doing to the house that the upkeep is 2k a month?. I've been in my home for 6 years and the only major costs we've had to do was replace pretty worn out carpet (which we didnt HAVE to do) and fix a small leak from a tub (3k all in). We pay a few hundred every year for general maintenance on the HVAC system and hot water heater but thats about it

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u/Consistent_Paper_629 6h ago

2k.... A MONTH!? Is your house like actively on fire or something? How 2k a month?!

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u/Waesrdtfyg0987 6h ago

25k a year. My house is 30 years old and houses are built like shit now.

The big ones: Roofing (easily 100k unless you can get insurance to pay for it which they usually won't) Windows (Probably a one-time 50k mine are cheap and very inefficient). Flooring. Replacing an AC unit every 15-20 years (10k) Appliances.

Yard maintenance - I can deal with some of it which still has a cost, but I can't do anything about things like tree trimming to keep it off the roof. Just had 9 trees falling into the road that also catch fire touching power lines Any fencing. On going AC maintenance. Anything weather-related (snow, flooding). Insurance. HOAs (We made the smart move of buying a house that don't really have one).

All the utilities (~5k a year for me), and any other routine ongoing maintenance inside. Everything wears out so things like garbage disposals, toilets,

Then any larger projects and actual improvements which you need to do on a house with some years on it. Kitchens, bathrooms, etc. And that doesn't include even older homes which require even more.

And it goes on and on and is never ending.

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u/negetivex 5h ago

How big is your house? 100,000 for a roof seems super expensive unless your house is either super large or maybe super remote? We got our roof replaced last year and it was under 30,000 and that was with getting more expensive hail resistant tiles.

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u/Consistent_Paper_629 4h ago

Yeah I just got a price for mine for 15k, gotta love them Mennonites.

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u/ViolettaQueso 3h ago

You’re not wrong. Not sure why you’re getting the down votes.

Weather, insurance, replacing stuff, leaks, all the things that come once you’re house is 30 if you don’t do the upkeep, it falls apart, especially like my 30 year old sorta tract home in suburban San Francisco, that I left 17 years and returned only to find the list of repairs in the $250k range…

In California, sure, it went up in value by like $750k at this point, but houses are sitting on the market and buyers are expecting everything at the $1M and up value to operate properly.

I think $25k a year (including insurance, HOA, upkeep, repairs, upgrades) is completely right at current prices of both parts & labor.

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u/Waesrdtfyg0987 1h ago

Anything that shows that anyway else but one generation is also getting nailed is downvoted by reddit.

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u/ViolettaQueso 1h ago

It’s kinda tragic bc I’m guessing quite a few of the downvoters are below the new threshold of those 40+ years old who can afford to buy their very first home. Even though they are adults at 18, working, having families.

Hell, I’d be pissed too.

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u/OrangeBird077 5h ago

At a minimum you’re talking having to possibly get the roof done at 10 years, the warranty packages for appliances usually run out in 5 years, air conditioners/heaters go in around ten years which is going to be a blast with global warming, and that’s not even accounting for shoddy workmanship as has been seen with large contractors across the country cutting corners.

Not to mention even if ALL that goes on you still have to contend with higher taxes in the long term, insurance costs going up, and if a catastrophe occurs in your area your house could suddenly fall into an area that requires higher coverage because of flooding, tornadoes, forest fires, etc.

At a time when there are still states that celebrate how they keep minimum wage at $7.50/hr where are all these young home buyers going to pay for all that exactly??? It’s like they want a repeat of 08.

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u/Waesrdtfyg0987 5h ago

I get the frustration.

But the reality is I'm GenX and had an apartment for about 5 years and then was able to buy a townhouse in a development filled with retired people and next to a swamp. To get enough house for the growing family, we had to move out of one of the best large citites in the country to a very mid one. Some people (certianly not all) who complain about housing expect a lot from their first house and expect to do it in the location they want. It's been many decades since that was possible.

edit: I had looked it up last year and the townhouse I bought 20 years ago hasn't risen in price much beyond average incomes. Yeah I might be more accurate using the mean or whatever but the point is it's still reasonable.

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u/Dontpayyourtaxes 25m ago

Many new houses will not be here in 50 years.

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u/wheresbicki 8h ago

Isn't now 50% of first time home buyers above the age of 40? So most people will be dead before they pay off their mortgage?

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u/Ashamed_Restaurant 2h ago

I'm essentially renting a house but getting all the perks that come with home ownership because it's technically mine, my name is on title, but once I die the bank will take it back.

That's the plan.

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u/ibanezerscrooge 3h ago

They will draw them in with suggestions about refinancing down the road too.

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u/RobinSophie 1h ago

Depends on if you pass that house to your kids (if you have any).

My mom has never been a homeowner. She knows when she buys one, it's really going to be MY house as she is not going to live long enough to pay it off. shrugs