A 50-Year Mortgage Won’t Fix Our Housing Problem

Housing affordability is one of the defining issues of our time, and nowhere is this more evident than in New York City. Mayor-elect Zohran Mamdani toppled Gotham’s Democratic establishment by tapping into New Yorkers’ frustration with soaring rents. His victory underscores a simple political reality: Americans—especially younger ones—are furious about housing costs.

They have every reason to be. Rents in job-rich hubs like New York, Los Angeles, and San Francisco are at record highs, and homeownership—long a pillar of the American Dream—is increasingly out of reach. The median first-time homebuyer is now 40 years old, up from 31 just a decade ago. That has political consequences: people who can’t afford to buy homes delay starting families, feel less rooted in their communities, and lose faith in institutions that promised upward mobility.

Against this backdrop, the Trump administration recently announced plans for a 50-year mortgage, which would extend beyond the traditional 30-year term. On the surface, it’s an elegant fix: expanding the payment horizon lowers monthly costs, which would allow more buyers to qualify.

The first problem, though, is the math. The monthly payment on a 30-year mortgage at 6.5 percent interest is roughly $2,530 on a $400,000 loan. Extend that same loan to 50 years, and the payment drops only to about $2,250, about an 11 percent reduction. That’s helpful, but hardly transformative, especially when rising home prices can erase those savings within months. Even worse, a 50-year mortgage and the longer window in which interest is paid means a higher total cost over the loan’s lifetime.

The deeper issue is structural. A 50-year mortgage is a demand-side response to a supply-side problem, boosting purchasing power without adding to the number of available homes. When supply is fixed, more demand simply pushes prices higher. What looks like an affordability policy quickly becomes a price-support mechanism for existing homeowners and lenders.

Demand-side interventions are politically tempting: they deliver immediate relief without antagonizing entrenched interests. Policies like down-payment assistance, tax credits, or extended mortgage terms make it easier for individuals to buy homes in the short run—which is popular.

What they don’t do is expand the overall housing stock. Instead, they reshuffle access within a zero-sum market, and over time sellers capture much of the benefit by raising prices. Without meaningful zoning or building-code reform, a 50-year mortgage would likely produce the same result.

Even if introducing a 50-year mortgage doesn’t lower housing costs in the long run, it is politically savvy, with appeal especially to younger Americans. But solving the affordability problem by pushing down existing home prices would be unpalatable to current homeowners, a powerful political bloc. As Charles Marohn predicted in his 2024 book, Escaping the Housing Trap, the 50-year mortgage could square this circle: “The 50-year mortgage . . . will allow desperate Americans in their 20s and 30s to buy homes from desperate Americans in their 70s and 80s, all while keeping prices elevated and the financial sector secure.”

In any case, the 50-year mortgage is a bullet that can only be fired once. Will future administrations introduce longer and longer terms? Will we see 70-year, 90-year, and 150-year products as “solutions” to each successive generation’s affordability crises?

The real solution lies on the supply side. Policymakers must enable more housing construction in the places people want to live. For decades, local land-use rules have throttled development through restrictive zoning, protracted entitlement processes, and arbitrary design standards. These barriers drive up land costs, constrain supply, and leave federal affordability efforts chasing their own tail.

Housing policy may be primarily local, but Washington is not powerless. The federal government can use its spending authority to align incentives. Conditioning certain funds—such as those for highways, schools, or transit—on local zoning reform would encourage municipalities to permit greater housing density near existing infrastructure. This carrot-and-stick approach helps ensure that federal dollars expand opportunity rather than entrench scarcity.

The federal government can also take smaller, practical steps to ease housing constraints. It can reform environmental-review processes that delay building projects without improving outcomes, expand support for modular and factory-built housing to lower construction costs, and encourage the redevelopment of underutilized commercial properties, such as offices and malls, into housing.

These reforms are slow and unglamorous compared with unveiling a new mortgage product. But they tackle the real cause of high housing costs rather than paper over the symptoms.

America’s housing shortage results from decades of underbuilding and regulatory capture at the local level. Real affordability will come only by making it easier to construct homes, whether by streamlining permitting, legalizing missing-middle housing, or allowing taller buildings near transit.

Demand-side policies may buy time. They won’t build homes.

Photo by Maxine Wallace/The Washington Post via Getty Images