The average first-time home buyer in the US is older than ever, but a new proposal under the Trump administration could leave them paying off a mortgage until old age.
The White House said it was considering a 50-year mortgage repayment plan to address the nation's housing crisis.
Federal Housing Finance Agency director Bill Pulte said it was "a complete game changer" for homebuyers.
Others fear it could leave home owners spending their retirement years with "crushing" debt.
What has Trump said?
Donald Trump floated the proposal on social media, though he later downplayed the plan as not "a big deal".
"All it means is you pay less per month," he said, speaking to Fox News on Monday, local time.
"Pay it over a longer period of time.
"It's not like a big factor. It might help a little bit."
This would not be the first plan of its ilk.
Americans already have something called a "30-year fixed mortgage".
It was introduced by Franklin Roosevelt's administration to create a standardised mortgage that would last the working years of an average American — the average life span back then was 66.
It's now largely become the standard.
This differs from Australia, where variable rates are much more common, according to Christian Nygaard, a professor of housing economics in the City Futures Research Centre at UNSW.
[graph: 30 year loan]First-time home buyers drop to record low
To understand the US's housing woes, it's worth understanding the country's differences first.
Kristle Romero Cortés, an associate professor at UNSW's business school, said Americans had been used to low interest rates for a long time.
Unlike Australians, it's also uncommon to put aside more than one-third of your income towards housing.
But recently, those rates have started to rise, creating a "wedge" for mobility — hampered by a lack of cross-financing like we have here.
"Even if you go to the same exact lender, you'll be getting a new mortgage and that means you'll be getting higher interest rates," Dr Cortés says.
With Americans unwilling to move and wrestle with higher rates, the nation faces a crippled supply for entry-level buyers.
Earlier this month, the median age of first-time home buyers hit an all-time high of 40, according to the National Association of Realtors (NAR).
Compare that to 1981, when a first-time home buyer was about 29.
The share of first-time buyers also dropped to record lows of 21 per cent.
[pic: age of first time buyers]The number of first-time buyers has been steadily contracting since the Global Financial Crisis, according to NAR deputy chief economist and vice president of research, Jessica Lautz.
"The historically low share of first-time buyers underscores the real-world consequences of a housing market starved for affordable inventory," she said.
Median monthly home owner costs also increased 3.8 per cent from 2023 to 2024, according to latest census data.
This was driven primarily by mortgage costs and insurance fees.
Let's quickly do the maths
To fully look at this proposal, let's first put it into practice.
Say a family buys a home at the median price of $US415,200 ($632,345) and puts down a 10 per cent down payment.
Say that comes with an average interest rate of 6.17 per cent.
They would owe about $US2,288 a month on a 30-year mortgage.
On a 50-year loan, they would owe $US 2,022.
But that maths presumes a bank wouldn't require a higher interest rate.
This typically isn't the case due to the US's preference for fixed rates.
That interest could equal another "medium-priced home" by the end of the loan's life, Dr Cortés says.
"You're extending the terms which means you pay interest for longer," she says.
"And anyone that understands compounding interests knows that interest on interest is going to be a large amount."
Spreading a loan over 50 years could also lead to lower equity accumulation.
"Basically, you pay off principal over 50 years rather than 30 years, which means that in each year, you accumulate a little bit less equity, " Professor Nygaard says.
He says in an Australian example, if you had an interest rate of 5.4 per cent on a property bought for $1.1 million and borrowed $880,000 — you would end up paying more than an additional 40 per cent in interest over the loan's lifetime on a 50-year plan.
Would people retire with a mortgage?
Highly likely.
According to the median average — where a home owner enters the market at 40 — they could be 90 before a 50-year mortgage is paid off.
Trouble is, the average life expectancy of an American is about 79.
The average retirement age is 64 for men.
Dr Cortés fears the US lacks the same social safety nets that may protect retirees with a mortgage in Australia.
And while she notes non-recourse debts in the US mean lenders cannot collect the loan from the home owner's heir after their death, the bigger picture is more troubling.
"The reality is it's not about passing on the debt. It's about living with that debt," she says.
"And how well do you live with that amount of debt and a fixed income in that time of your life?
"The weight of that debt is crushing.
"You don't even have to go to the next generation to experience the potential risks and unnecessary cost."
There's also a less-discussed behavioural problem the loan could pose.
The lower monthly repayments may encourage people to take out a larger loan to begin with, Professor Nygaard says.
"The inclination for home buyers could be to say well, 'Why don't we borrow a little bit more', and banks might similarly reflect on the lower monthly outgoings and say, 'Well, why don't we just approve a little bit more,'" he says.
"If that happens, then you would get that differential capitalised in the property price.
"So that property price would go up, you would need to borrow more and it would quickly erode the benefits."
He says that outcome could also leave the economy at risk.
"Then we are back to square one, just with a population much more indebted and much more exposed to interest rate changes," he says.
Could it be implemented soon?
The short answer is no.
Mortgage giants Fannie Mae and Freddie Mac — who guarantee about half of existing home loans — can't insure a mortgage of more than 30 years, making it a difficult sell to investors.
Congress would also have to amend current laws that were put in place to stop predatory lenders.
"Any change like this would have a lot of spill overs," Dr Cortés adds.
Mr Pulte, amid early criticism, said it was just "a potential weapon in a WIDE arsenal of solutions".
Many experts believe those alternates would be better placed addressing a lack of supply homes or the raw cost of house building.
"Many of the big things that would address supply right now are going in the wrong direction," Mike Konczal, senior director of policy and research at the Economic Security Project told AP.
Dr Cortes says it's a potential tool but "obviously not a panacea for housing affordability".
She says adjusting the financing of a new mortgage to be a longer term doesn't bring interest rates down or open up any new homes.
"It really just kind of shifts the burden between when you're paying things."
