Mortgage rates are lower than they were a year ago, and home prices have fallen in many areas. Still, home affordability remains the worst in decades (US ratio below since 2009).
The culprits are high prices and operating costs, which skyrocketed in the aftermath of the pandemic. The median US home price (402K in Q1 2025) was about 5x the median household income nationally (83k), compared with a 50-year norm of 3 to 4x (shown below since 1975).

In Canada, the numbers are worse: the average national home sale price ($676k in September) was 7.2x the median household income ($93k before tax). Affordability varies by area (shown below, courtesy of WOWA.ca). Still, only Regina, Saskatchewan, and Edmonton, Alberta, had average home sale prices below 4x the median household income, compared with 6.5 to 12.7x in major population centers in Ontario and British Columbia.

There’s a strong correlation between inflated home prices and inflated debt. In Canada, mortgages account for 75% of the record $3.07 trillion in household debt (StatsCan Q1 2025). In America, mortgages account for 70% of household debt across all age groups from 30 to 70+ (Bianco Research).

Fewer and fewer households are likely to have their homes paid off by retirement, and this greatly diminishes the ability to save for retirement and other goals/needs.

Apparently, the Trump administration is touting a solution in extending US mortgage amortizations to 50 years, up from the current 30-year norm. President Trump highlighted the plan on his social platform, and the head of the US Federal Housing Finance Agency (FHFA), Bill Pulte, responded that they are indeed “working on The 50-year Mortgage — a complete game-changer.”

Thanks to President Trump, we are indeed working on The 50 year Mortgage – a complete game changer. https://t.co/HZDPzO0qJG

— Pulte (@pulte) November 8, 2025

This is presented as a solution to lower monthly payments for homebuyers, especially younger people (HousingWire). See, Trump proposes a 50-year mortgage to help affordability:

Using Fannie Mae‘s mortgage loan calculator with a 20% down payment and a mortgage rate of 6.575%, the breakdown below shows payments at different home prices and mortgage terms. This is just for principal and interest and doesn’t include property taxes or insurance. It also assumes the same interest rate for a longer-term loan, which is not a given.

$300,000
30-year fixed: $1,529 principal and interest
40-year fixed: $1,418 principal and interest
50-year fixed: $1,366 principal and interest

$400,000
30-year fixed: $2,038 principal and interest
40-year fixed: $1,891 principal and interest
50-year fixed: $1,822 principal and interest

$500,000
30-year fixed: $2,548 principal and interest
40-year fixed: $2,363 principal and interest
50-year fixed: $2,277 principal and interest

Extending amortization to 50 years lowers the monthly cash flow burden, which might elevate some demand (support prices) in some housing markets.

But from a risk/cost of capital perspective, longer amortizations balloon total interest paid, slow equity accumulation, and drastically reduce the borrower’s long-term saving and spending ability.

The cost of borrowing is hardly ever acknowledged in home-buying discussions beyond talk of the monthly payment, but the difference between borrowing $600k over 15, 20, 30, and 50-year amortization periods is mind-blowing (table below courtesy of DCP).

Paying a home off in 30 years versus 15 years results in a 123% increase in total interest costs, and amortizing over 50 years results in a 307% increase in interest costs over the life of the loan. In other words, a $600k home loan ends up costing $926k over 15 years, $1.052m over 20 years, $1.329m over 30 years and $1.962m over 50 years.And this is just principal and interest payments, to say nothing of property taxes, insurance, maintenance and utilities.

Homes are lovely to own when they are comfortable and affordable. But they are not a wise financial decision at every price, and ‘helping’ people into lifelong debt is not helping them or our economy, which depends on people spending less in the near term so we can build up savings and investment for longer-term needs and sustainability.