(Bloomberg) — Bill Pulte, the Federal Housing Finance Agency director, said the administration is “actively evaluating portable mortgages” just days after President Donald Trump’s call for 50-year mortgages fell flat with industry and consumers.
Pulte didn’t give any details on how the plan would work in his social media post on Wednesday. In theory, a portable mortgage would allow a homeowner to transfer their current mortgage rate from one home to another.
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Portable mortgages could help loosen the logjam of sales caused by the so-called “lock-in effect,” where existing homeowners are reluctant to list their homes and move for fear of sacrificing their current low mortgage rate to get a much more expensive loan.
The push to innovate around mortgages underscores the urgency in the White House to do something about the high cost of housing, after home prices skyrocketed and mortgage rates doubled in the wake of the pandemic. Rates have been coming down more recently but the current level of 6.22% is still well above the 3% rates seen just a few years ago.
Read: Trump’s 50-Year Mortgage Loses Steam as Industry Questions Costs
The various proposals also come after a slate of state and local elections last week that Republicans lost by wider-than-expected margins, with voters citing concerns about affordability.
Pulte was quick to praise Trump’s social media post last weekend when the president referred to the possibility of 50-year mortgages. Yet the idea has struggled to gain traction. Paying for a home over five decades would increase the amount of interest homeowners would pay while slowing the amount of equity they build in their homes.
The FHFA did not immediately respond to a request for comment.
(Adds details on portable mortages and rates from third paragraph.)
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