President Trump is a real estate guy. More so than any other indicator, I think Trump looks to real estate as a way to gauge how the economy is doing. Right or wrong, he’s set a big big target, the mortgage industry. And they love it.
You might already know that first-time homebuyers’ average age is up to 38. It keeps climbing. There is a variety of causes for this, but the result is that there are fewer homeowners, a cornerstone of our economy. One big reason for the increased age is due to affordability. With the median home price of $415,000 (Fed Res Bank St. Louis, Jul 2025), it’s no wonder that younger people are having difficulty buying a home. Really, it’s not the price; it’s the monthly payment. For the past 70 years, US homebuyers have enjoyed the ability to get a 30-year amortized loan on a house. They are able to pay down their mortgages for 30 years, at the end owning the house outright, in return for paying 30 years of interest. What if we spread out those payments over 50 years instead of 30?
Enter the 50-year Mortgage
This long mortgage is almost going to go for the lifetime of the home buyer. It won’t lock them into a house, but the rate might. Interest rates usually go up as the amortization goes up. This reflects the increased risk of having the money loaned for longer. But, due to the longer payback time, the monthly payments are lower. The lendee just pays much more interest over time to get the place paid off. This will be nice for mortgagers, but I’m not so sure for the homeowner. Sure, more of them will get into the market because they will be able to pay more. This will have the effect of driving prices up. But, since they can pay more and have a lower monthly rate, they will be able to. This will lock them into the 50-year product, paying more interest and less principal, effectively slowing down their investment in their primary residence. In other words, their equity build is greatly slowed.
Many buyers will take Trump up on this offer, only seeing the monthly mortgage. That will prop up the economy briefly, but due to the sale price increase, it’ll probably be blunted. It will get more people into homeownership and if that is the only goal, it’ll be seen as a success. Another side effect is that there will be more defaults (with each mortgage having 20 years more to run into missed payments), and the government will have to do/require/pay more to insure against this.
And What About Investors?
Investment properties will not be able to take advantage of this long amortization. They will have to stick to 20-year products. But some things will change, and probably for the worse.
There will be more competition for residential properties. SFR investors will have a harder time finding properties to buy. The ones they do find will have a higher price.
Banks will have more money lent on these longer term loans, tieing up their money which could be lent elsewhere. Multifamily and commercial investors will have harder time finding loan money due to this. That will probably be less of a problem as some banks don’t do any residential loans. But it will still cause headaches.
The Fed Funds Rate may have more pressure to stay high. This will be due to being satisfied with more homeownership and consistently having to fight inflation in this era. They will be encouraged to keep rates high, which means that most loan rates will stay high for investors, making it harder to buy new properties.
In short, 50-year amortized mortgages will probably make it harder to invest. I’m looking forward to watching this over the next year. I think it’ll probably happen and we will see whether I’m right. For now, keep cultivating relationships with commercial bankers. Don’t anticipate the Fed Funds Rate to decrease more than one more time in the next year.
