"As mortgage rates stay stubbornly high, President Donald Trump and his administration have floated a few ideas to help buyers afford a mortgage. Most notably, the president said he's considering 50-year mortgages. Bill Pulte, head of the Federal Housing Finance Agency, said his team is also exploring ways buyers can lock in low interest rates from older mortgages. There are a slew of creative financing options out there that could make buying a home cheaper."
"Some could backfire and lead to higher prices amid an ongoing housing shortage. All of the discussion about more affordable mortgages is a function of politicians attempting to come up with short-term solutions to a complicated problem that can't be fixed overnight because "they're under pressure from their constituents who can't afford to buy," said Lance Lambert, co-founder of real estate media and research group ResiClub."
Mortgage rates remain stubbornly high, prompting proposals such as 50-year mortgages and mechanisms to lock in older, lower rates. Longer-term loans can reduce monthly payments and expand apparent affordability for some buyers. Those same loans substantially increase lifetime interest costs and overall buyer debt burdens. Creative financing options carry risks that could worsen housing supply pressures and drive up prices. Political leaders are advancing short-term measures under constituent pressure while economists warn that such fixes can backfire and do not address underlying supply and cost dynamics in the housing market.
Read at Business Insider
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