President Trump. USA Today/Reuters.
President Trump said that he wants to keep house prices high in remarks today. USA Today. Trump said he wanted to make it easier to buy a home by lowering interest rates, but did not want to lower prices as it would affect current homeowners. Trump has made some efforts to make housing more affordable, such as banning investors from buying family homes and purchasing mortgage backed securities to lower home loan rates. But prices remain high and the median age of a new home owner is now 40.
My Comment:
I am mostly happy with President Trump. He's done a lot of things I like in foreign policy, immigration and social policy. But every once in awhile he says something ridiculous and this is one of those times. Nobody that doesn't currently own a home wants to hear the words "higher prices" unless it's is followed by "won't be a thing anymore".
I think it is an example of how Trump's age is a liability to him. He's a member of the Silent Generation, a generation that came up with low housing prices. I am not sure Trump realizes just how desperate it is for people in the Millennial and Zoomer generations. I know as an older millennial myself that still rents, the last thing I ever want to hear is that prices are going to not only remain high, but go up. I saw this headline and rolled my eyes and swore out loud. For me, it really seems like there was a window for me to buy a house and I may have missed it. For the Zoomers, they realize that they are never going to be able to buy one as the window closed years ago for them.
I do understand that any policy to lower home prices is also a liability for the Republicans and Trump. The Boomers, the remaining Silents and the Gen X and older millennials that got out on the last chopper from Saigon (or Kabul) want these prices to be high. Should prices drop to affordable, many of those people would lose their shirt.
That's little comfort for people like me though. As someone who has been financially responsible and worked very hard to get a large down payment for a house, it does feel like a slap in the face to say that prices should stay high. I don't really care if the boomers lose their shirt, it's well past time I get some of the prosperity and luxury they took for granted for decades.
Some of this is just optics though. Folks would absolutely be helped by lower interest rates. Indeed, that's my problem. I have a rather huge down payment secured but with the interest rates the monthly payments (along with insurance, utilities and things like association fees) are well above the amount I am currently paying for rent. Lowering the rates would bring the loan cost down and it would help me afford a home, even in a hot real estate market where prices are likely to increase no matter what Trump does.
Had Trump waited to mention this after interest rates had been reduced it might not have been so poorly received. But his timing couldn't be worse. Though rates have decreased slightly since their high, he made the announcement right after the Fed said they wouldn't reduce the rates for awhile. Trump's other actions might help but the timing could not have been worse.
And I do think that both Trump and the Republicans underestimate the anger over this issue. It's one of those things where people might be willing to compromise on what they are willing to tolerate from the Democrats if they just vow to lower home prices. The Democrats are just as out of touch on this issue as Republicans so I don't expect them to pounce, but there is a potential for defection here. If the Democrats would ever get smart and drop their insane opposition to popular things like deportation and social issues like transgenderism, they could actually make gains because of gaffes like this.
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