If you've fogged a mirror in the last five years, you know that literally everything is more expensive now that it was back then. Maybe more than anything else, that fact is an ugly truth in the price of homes. Love him or hate him, President Donald Trump is making some moves to make homebuying more affordable, and that's something we should all hope works! Here are the details.
Here are Five Fast Facts on Trump's latest effort to make homes affordable:
- 🤔 The Math Ain't Mathin' - Most Americans can't afford 75% of the homes in the country, and in 99% of U.S. counties, the typical house costs way more than regular people can historically afford - it's like every home has a secret "Only Millionaires Allowed" sign on the front door.
- 🦕 Where We Are - Current 30-year mortgage rates are stuck around 6.2% - better than the 7%+ of a year ago, but basically the same level as dinosaurs roamed the earth in September 2022.
- 🔍 Stuck In The Mud - A lot of homeowners locked in their mortgages during the pandemic's historically low rates, some as low as 3% or lower. Today's much higher rates are why they're clinging to their old mortgages harder than a toddler clings to a lollipop, and that's partly why there aren't enough homes to go around right now.
- 💰 Mad Cash - Trump wants Uncle Sam to drop $200 billion (currently sitting in Fannie Mae and Freddy Mac accounts) on mortgage bonds faster than your uncle drops cash at a casino buffet. This should cause interest rates to drop, which should start persuading people to buy and sell.
- 👀 Proceed With Caution - Some say that while this move should help in the short term, there's a danger of eventually pushing mortgage rates back up due to uncertainty from burning through those reserves (meant to stabilize the market in a downturn).
🔥Bottom line: It's part mad-genius move, part "hold my Diet Coke" energy. Will it work? Hard to say, but most think it's got at least a chance to help homeownership suddenly feel possible for normal (non-rich) humans again. And wouldn't that be a win for all of us?
Are you sitting on one of those sweet low interest mortgages right now?
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