President Donald Trump recently proposed the introduction of a 50-year mortgage as part of efforts to improve housing affordability in the United States. This initiative arises as many Americans continue to face significant barriers to home ownership. Experts in Oklahoma are evaluating the potential impact of this extended mortgage term, acknowledging both its advantages and potential drawbacks.
According to the National Association of Home Builders and Wells Fargo, the cost of housing remains prohibitively high. Data from the second quarter of 2024 indicates that a family earning the median income of approximately $104,000 must allocate around 36% of their earnings to cover mortgage payments on a median-priced new home. For low-income families, defined as those earning 50% of the median income, this figure rises to an astonishing 71%.
The concept of a 50-year mortgage is being championed by Bill Pulte, Director of the Federal Housing Finance Agency, who describes it as part of a “wide arsenal of solutions” to address current housing challenges. While a longer mortgage term could lower monthly payments, concerns persist regarding higher interest rates and slower equity growth for homeowners.
Historically, longer mortgage options emerged during periods of economic distress, such as the 15- and 30-year mortgages developed in response to the Great Depression. Until recently, the idea of a 50-year mortgage was largely unheard of among Oklahoma industry professionals. Kimberly Robbins, President of the Oklahoma City Metropolitan Association of Realtors (OKCMAR), emphasized that while lower payments might attract buyers, banks could benefit the most through increased interest revenue over time. She stated, “I don’t believe that this is the best solution, but I think it could lead us to conversations that would find a good solution.”
Local lenders are assessing the viability of the proposed mortgage. LaNell Long, a mortgage loan originator at Stride Mortgage, believes there would be demand for a 50-year mortgage among specific buyer demographics. She highlighted the need for potential borrowers to fully understand the long-term implications of such a loan. “We would really need to assess what their short- and long-term goals are, and whether saving a couple hundred dollars a month just to be able to get into a home that they want is worth it,” Long stated.
The 50-year mortgage might find more traction in coastal markets or areas with a higher cost of living, where home prices significantly exceed those in Oklahoma. Long noted that these regions might see a greater appetite for longer mortgage terms, contingent upon lenders’ willingness to offer such products and the acceptance of these loans in the secondary market.
As national discussions continue regarding housing affordability, the 50-year mortgage proposal could serve as a catalyst for broader dialogue about innovative solutions to the ongoing housing crisis. With housing prices continuing to rise, the search for accessible home ownership options remains a pressing concern for many Americans. The extent to which this new mortgage product will be embraced in Oklahoma and beyond will depend on a range of factors, including consumer education and market acceptance.
