• The Trump administration is floating the idea of a 50-year mortgage, which it says could help address housing affordability across the US
• While the move could result in short-term savings, housing and financial experts caution longer-term costs could make things worse
• Michigan’s housing market was hard hit by the Great Recession, making the policy pitch an even harder sell 

LANSING — President Donald Trump’s proposal for establishing 50-year-long mortgages could have serious implications for Michigan, where home prices are rising amid an ongoing housing shortage.

Federal Housing Finance Agency Director Bill Pulte first floated the idea of a half-century mortgage earlier this month. President Donald Trump endorsed it on social media and later defended the idea on television.

“We are laser focused on ensuring the American Dream for YOUNG PEOPLE and that can only happen on the economic level of homebuying,”  Pulte wrote on social media.

The former chairman of a nonprofit aimed at blight removal in Detroit and the grandson of a prolific Michigan homebuilder, Pulte referred to the 50-year option as “simply a potential weapon in a WIDE arsenal of solutions that we are developing right now” to help get people into homes.

Related: 

• Michigan group pitches $800M affordable housing plan: ‘We have to invest’
• Old buildings, new ideas: Michiganders fight housing shortage with innovation
• Michigan asks employers to grow housing with $10M fund: ‘Build, baby, build’

But the idea of forgoing the long-standard 30 year mortgage – created as a means for Americans ravaged by the Great Depression to own a home– for a 50 year one has some scratching their heads.

While the monthly payments under a 50 year plan could be less per month than what’s paid in a 30 year mortgage, housing experts point out that homeowners would be paying significantly more in interest over time.

What’s more, the policy “does not tackle the root causes” of what’s making homeownership unaffordable in the first place, said Lan Deng, a professor of urban and regional planning at the University of Michigan.

“The issue about housing affordability is that the housing cost is far higher than what most households can afford,” Deng said, listing rising construction costs, a shortage of laborers and rising land value as contributing factors.

A 50-year mortgage, she added, “does not directly tackle the dysfunctional housing markets we are seeing.”

The Michigan market

Homeownership is becoming more unattainable than ever for younger Americans, a November report from the National Association of Realtors noting that the median age of all home buyers in the US hovers around 59 years old.

For first time home buyers? The median age is 40 — the highest it’s been in 40 years.

While there isn’t more specific data relative to Michigan available, Deng said that what’s being observed at the national level is undoubtedly happening in the state as well.

“The gap between housing costs and household income, it’s also very serious in Michigan — maybe sometimes even more serious than in some other states,” she said.

That is, at least in part, because of an ongoing housing shortage both nationally and in Michigan, where officials estimate more than 100,000 additional housing units are needed to meet existing demand.

There’s also the lingering impacts of the Great Recession, a period of global market decline which spanned from 2007 through 2009 and overlapped with the 2008 financial crisis. It hit Michigan particularly hard due to its ties with the auto industry.

Unemployment peaked at more than 15% — the highest in the nation during the recession — and the state lost more than 1 million automotive industry related jobs, according to a policy study from Michigan State University.

While Michigan is, and has been, working to get back on its feet, Deng said the recession set many residents back in terms of job opportunities and household income.

Data from the US Census Bureau estimates Michigan’s median household income in 2023 was around $71,000 — $8,000 less than the national average.

At the same time, housing prices are climbing in Michigan. According to the tech real-estate marketplace company Zillow, average Michigan home values have climbed from $185,556 in late 2020 to $253,279 in October, a 36% jump.

The cost of a 50-year mortgage

If the key to getting more people into homes is tackling affordability, then financial experts say a 50-year mortgage isn’t necessarily the cure the Trump administration may be looking for.

Jonathan Woloshin, head of real estate and lodging research at UBS Wealth Management, estimates that a 50-year mortgage would actually result in homebuyers paying 225% of the total original home price due to accumulated interest.

That’s more than twice the level of interest accrued than under a 30-year mortgage, Woloshin noted in a Nov. 11 policy report. Then there’s the issue with equity.

“The much larger front-loaded interest expense component of the 50-year mortgage leads to substantially slower home equity generation,” Woloshin wrote. “It would take more than 38 years to reach 50% equity under a 50-year compared to slightly more than 20 years under a 30-year mortgage.”

State housing officials are monitoring all ideas and proposals that could expand access to affordable homeownership, Michigan State Housing Development Authority Spokesperson Katie Bach told Bridge this week, “and that’s what we’re doing with the recently introduced 50-year mortgage concept.”

Deng, the University of Michigan professor, also expressed concern that a person would even be able to pay back the terms of a 50-year loan when considering the rising age of average first time home buyers.

“Will the lenders be confident that the borrowers have the ability to work for 50-years to be able to pay back the mortgage?” Deng asked, before adding: “Do people even want to work into their 70s – even 80s – if people are buying their property in their 30s?”

Tackling the problem

While there’s no singular answer to the question of how to make housing more affordable, Deng says the state can help by diversifying the types of housing it builds — which it’s already doing.

In February, the state announced it had invested $2.15 billion in affordable housing in Michigan throughout 2024, resulting in the construction, rehabilitation, and purchase of 12,421 homes.

Since 2021, MSHDA officials estimate the agency has pulled more than 79,000 of the 115,000 building permits it needs to make its goal of adding more housing stock to the state by 2027.

Michigan is still short roughly 119,000 housing units, per May MSHDA estimates, though that’s a sharp decline from the estimated 190,000 housing units Michigan lacked at the start of 2024.

“Only new units you can build will help relieve market pressure,” Deng said, noting that MSDHA’s efforts to build “are in the right direction, and they are working.”

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