Corcoran Group broker Noble Black analyzes President Donald Trump’s proposals for housing affordability and the state of the market on Varney & Co.
President Donald Trump said Thursday that he is “not a big fan” of a proposal his administration is developing that would allow potential homebuyers to withdraw from their 401(k) retirement accounts for a down payment.
“I’m not a big fan,” Trump told reporters on Air Force One as he prepared to return from his trip to the World Economic Forum in Davos, Switzerland. ‘Other people like it. They’re talking about taking out money to make a down payment on a house.
“One of the reasons I don’t like it is because their 401(k)s are doing so well. You know, 401(k)s are gone 80%-90% in some cases,” the president said. “The housing market is good, but 401(k)s are doing much better than the housing market.
“I like to keep their 401(k)s in great shape,” Trump added. “I’m not a big fan of making a deposit, I’m not. I’m so happy with the way 401(k)s are doing. I’ve had people tell me they’re up 88% and over a period of a year, a whole year. It’ll be, I mean, almost 100%.”
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President Donald Trump said he is “not a fan” of the 401(k) withdrawal plan because retirement accounts have produced strong returns. (Denis Balibouse/Reuters)
Trump’s comments come after the administration previewed the 401(k). deposit proposal last week as part of a broader push from the White House to improve the affordability of homeownership.
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The Trump administration discussed a plan that would allow 401(k) withdrawals for home down payments. (iStock/Getty Images Plus/Getty Images)
Hassett went on to say that “we will allow people to take money out of their 401(k)s and use that for a down payment,” adding that the proposal would be unveiled during the president’s trip to Davos.
During his speech to the World Economic Forumthe president made no mention of the 401(k) deposit proposal and instead focused on other aspects of his affordability agenda.
Trump discussed his call for Congress to place a 10% cap on credit card interest rates for one year, citing rising interest rates credit card debt as a challenge for Americans trying to save for a down payment.
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NEC Director Kevin Hassett presented the 401(k) deposit plan the week before Trump’s trip to Davos. (Al Drago/Bloomberg via Getty Images)
The president also discussed his plan to stop institutional investors from buying homes, which he said is driving up home prices and which he said is “just not fair to the public.”
Trump’s proposed interest rate cap on credit cards has drawn resistance from the US economy financial services industry, which has warned that a cap on interest rates would limit consumers’ access to credit and cause many existing cardholders to lose their cards or eliminate rewards and perks.
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Investors have also criticized the president’s plan to block companies from buying single-family homes.
They note that this would likely push prices up even further, since the policy wouldn’t expand the supply of housing and all that business investments has helped build new homes and increase supply on the market.
