The assembly of the American Dream begins with a front door and a mortgage. President Donald Trump is right when he says the dream is falling out of reach for too many families. Home prices have skyrocketed, mortgage rates have doubled since 2021, and young Americans are finding it harder than ever to buy a home and get settled.
So it’s no surprise that the government is exploring new ways to ‘make housing affordable again’. One such idea, a 50-year fixed-rate mortgage, promises smaller monthly payments by extending the term of the loan.
But the problem isn’t mortgage rates or lengths; it’s the cost of the house.
President Donald Trump is right when he says the American dream of homeownership is falling out of reach for too many families. (AP Photo/Mark Schiefelbein)
Extending the loan terms only spreads the pain over more years. Longer mortgages may reduce monthly bills, but they multiply total debt. On a $400,000 loan at 6% interest, a 50-year mortgage means paying about $1.26 million over the life of the loan, more than three times the original amount. After twenty years, you would still owe almost $350,000.
HOUSING COSTS ARE CRUSHING FAMILIES – THIS IS THE WAY OUT
The real challenge is that the government has made building and buying houses too expensive in the first place. Washington and local governments pile up costs every step of the way through tariffs, taxes, fees and endless red tape. Builders cannot build affordably if they are forced to follow an obstacle course of regulation and delays.
Even Bill Pulte, President Trump’s housing chief and a longtime homebuilder himself, has acknowledged how high interest rates and housing costs “really hurt people.” He is right about the pain families are feeling, but the solution is lower costs. As any economist will tell you, affordability starts with more supply, not more subsidies.
Mackenzie Bishop, a homebuilder with Abrazos Homes in Albuquerque, recently laid out the math in blunt terms. Local taxes and fees add more than $40,000 to the cost of each new home before a single nail is driven. Add to that property tax increases of 50 to 70% on multifamily projects, and new construction comes to a halt. Multiply that across the country, and it’s no wonder why builders can’t keep up with demand, or why the homes that do get built are out of reach for working families.
WHY YOUR PARENTS CAN BUY A HOUSE WITH ONE SALARY – BUT YOU CAN’T WITH TWO
It’s the same story nationally. Tariffs have increased the prices of building materials such as lumber, steel and concrete. Meanwhile, permitting and environmental reviews can delay projects for years, raising financing costs and eliminating the incentive to build in the first place.
These are the hidden taxes that keep America’s housing supply artificially scarce, and it’s the scarcity – not the length of the mortgage – that drives up prices.
Even as inflation has cooled from its peak, prices are still rising at about 3% per year. ‘Sticky’ costs such as rent, insurance and accommodation remain stubbornly high. That means families’ paychecks are thin before they even start saving for a down payment. The Federal Reserve could eventually cut rates, but unless we solve the underlying supply problem, homes will remain unaffordable regardless of the term of the loans.
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The good news is that conservatives already know how to fix this. Instead of inventing new forms of debt, we can make it easier and cheaper to build the homes Americans need. That means streamlining permitting and cutting red tape that slows construction, eliminating tariffs that drive up the price of materials, and expanding legal immigration to rebuild the skilled workforce that keeps the housing market moving.
It also means reforming zoning laws that allow a handful of activists to block off entire neighborhoods, and phasing out federal subsidies that drive up prices by distorting credit markets. Together, these reforms would address the real causes of high housing costs: scarcity, inefficiency, and government overreach.
Do those things, and the market will do what it does best: provide abundance, innovation and opportunity.
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The goal of homeownership is worth fighting for. It strengthens families, builds communities and creates prosperity for generations. But we can’t borrow our way to prosperity. The answer to high housing costs is not a longer mortgage; it is a lighter burden.
President Trump’s instinct to put working families first is exactly what he is doing. The best way to make housing affordable again is to free up America’s builders, entrepreneurs and workers, not by creating a new kind of debt. Let builders build. Let the markets work. Let families keep more of what they earn. This is how we restore the American dream: build, baby, build.
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