MW Homeownership has never seemed so out of reach. Will Trump's Davos speech offer new hope?
By Aarthi Swaminathan
Buying a house in the U.S. has become so unaffordable that the median age of a first-time buyer is now a record 40
President Donald Trump has pitched a variety of ideas to address the housing affordability crisis. He has said he'll provide more details in a speech in Davos, Switzerland, on Wednesday.
It's been exactly one year since President Donald Trump took office for a second term, and he has come under pressure to address voters' concerns over housing affordability, particularly ahead of this fall's midterm elections.
Trump has proposed several policies in posts on social media geared toward lowering housing costs and making homeownership cheaper. They run the gamut, from creating a 50-year mortgage to banning large investors from buying up single-family homes.
More details on how he plans to address concerns about the cost of living - including the housing affordability crisis - are expected in a speech Trump is scheduled to deliver Wednesday in Davos, Switzerland, where the World Economic Forum is being held.
The stakes are high when it comes to housing costs. Home prices have skyrocketed in recent years, with the median price of an existing house hitting a record high of $414,400 in 2025.
In the last six years, the typical home's value has gone up nearly 50%, from $242,000 to $357,000, according to Zillow (Z) data as of December 2019 and December 2025.
The U.S. is still reeling from the run-up in home prices that was driven in part by rock-bottom interest rates during the pandemic, Jill Cetina, a finance professor at Texas A&M University, told MarketWatch.
"We've now pulled forward a decade's worth of home-price appreciation and locked younger buyers out of the market," she said. The median age of a first-time buyer shot up to 40, a record high, last year.
"Are we going to leave it like this for a generation? Or are we going to fix it?" Cetina added. "That's the foundational question."
Housing costs have skyrocketed
Even as home prices have increased in recent years, so have mortgage rates, making buying a home even more expensive. Rates have doubled over the past few years, adding up to hundreds of thousands of dollars in additional borrowing costs for home buyers.
Trump has tried to address elevated mortgage rates, with mixed success. In mid-January, he said he planned to direct his representatives to purchase $200 billion in mortgage-backed securities, an announcement that pressured mortgage rates down to the lowest level in over three years. That drop was reversed a week later as financial markets weighed the effects of Trump's threat to impose tariffs on European allies over Greenland.
But mortgage rates are only one piece of the affordability puzzle. Buyers' incomes need to catch up with soaring home prices, too.
"Median prices have risen nearly twice as fast as family incomes since 2020 (54% versus 30%)," Sal Guatieri, a senior economist at BMO Capital Markets Economics, wrote in a report.
In other words, "while the President's prodding of Fannie and Freddie to buy $200 billion of mortgage bonds might trim a quarter percentage point from rates, according to some estimates, the heavy lifting on affordability will likely need to come from incomes outpacing prices," he said.
Trump's proposals on housing
Trump administration officials have offered a variety of proposals aimed at addressing high housing costs. "I really respect trial ballooning all these ideas," David Dworkin, chief executive at the National Housing Conference, told MarketWatch. "It's an important way to get broad feedback before a formal announcement is made."
A new 50-year mortgage. Trump pitched a 50-year mortgage to spread the cost of a home loan over a longer period. That would theoretically lower a buyer's monthly mortgage payment but would also mean that a typical buyer wouldn't pay off their loan until they were well into old age - and they would pay much more in interest over the life of the loan.
Making mortgages portable and assumable. Federal Housing Finance Agency Director Bill Pulte has said he is looking at making mortgages assumable, meaning a new buyer could take over a homeowner's current mortgage and its rate, as well as portable, meaning that a homeowner could take their current mortgage rate with them when they move to a new house.
Banning large institutional investors from buying single-family homes. Trump proposed banning large institutional investors from buying single-family homes, with the goal of freeing up housing inventory for people who are buying homes to live in, not rent out.
Allowing people to use their 401(k)s to fund a down payment on a house without a penalty. White House economic adviser Kevin Hassett has said the Trump administration is considering a plan that would allow people to dip into their 401(k) without penalty to make a down payment on a house. Current rules allow workers to take money out of their 401(k) accounts before age 591/2 but impose a 10% early withdrawal penalty as well as taxes.
Purchasing $200 billion in mortgage bonds. Trump also said he was planning to direct representatives to purchase $200 billion in mortgage bonds. The news drove the 30-year mortgage rate down to the lowest level in three years. The rate rose again days later after Trump threatened tariffs in Europe as part of his bid to control Greenland.
Taking Fannie Mae and Freddie Mac public. The Trump administration has also repeatedly talked about taking housing-finance giants Fannie Mae and Freddie Mac public. These two institutions back about half of all residential mortgages in the U.S.
Victor Reklaitis contributed.
-Aarthi Swaminathan
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January 20, 2026 15:25 ET (20:25 GMT)
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