Beating the drum for a 40 year mortgage today:
https://www.cnbc.com/2024/08/20/op-ed-the-case-for-a-40-year-mortgage.htmlReally bad ideas from a guy who claims to be in the business of financial literacy:
A 40-year mortgage program can also address the growing wealth gap in America. Homeownership has historically been one of the most effective ways for families to build wealth. By making homeownership more accessible, particularly for young people, minorities, and those in rural areas, we can promote more equitable wealth distribution and help close the economic divide. This approach also addresses social justice concerns, particularly for historically marginalized communities like African Americans, where the homeownership rate lags at 45% compared to 75% for white Americans. Bridging the homeownership gap can help close the wealth gap, advancing social justice through an economic lens.
Extending the mortgage term and subsidizing interest would just boost prices and be a gift to all the existing homeowners. Meanwhile, the new buyers would be on the hook for those prices for four decades, often past their working years.
Not to mention that home ownership is often a trap for poor people. The maintenance costs are lumpy, and even if they can finance the big stuff it's on bad terms. Houses on the bottom of the property ladder don't appreciate to the degree more desirable neighborhoods do. It's all the risk of a house with less upside. Renting isn't the worst thing in the world.
Squeaking into a rundown house in a bad neighborhood with a 40 year mortgage is a trap, not the path to generational wealth.
