Add news
News Every Day |

A 40-year mortgage is the answer to improving home affordability, CEO says

  • A 40-year mortgage could make homeownership attainable for more Americans, a CEO says.
  • Bryant argues that extending mortgage terms would address the affordability crisis amid high rates and record prices.
  • A 40-year mortgage aligns with modern life expectancy and could boost economic stability, Bryant said.

Owning a home in America feels like a dream for many, but it could become a reality if the government begins offering a 40-year mortgage.

That's according to a recent CNBC op-ed from John Hope Bryant, the CEO of Operation Hope, a financial literacy non-profit,

Bryant wrote that amid an extended period of elevated mortgage rates and record home prices, extending the duration of the typical 30-year fixed mortgage by a decade would open the door for a lot of prospective home buyers who have been boxed out by an ongoing affordability crisis.

"I propose a bold new approach: a 40-year mortgage using the Federal Home Loan Bank (FHLB) system as the framework, with federal subsidies for first-time homebuyers who complete financial literacy training," Bryant said.

Such a proposal would drive economic growth as more people buy homes and spend money on furniture, appliances, renovation projects, and home services, Bryant argued.

"By making homeownership attainable for more Americans, we lay the foundation for a more resilient economy. Homeowners are more likely to save, invest in their communities, and contribute to economic stability," Bryant said.

A 40-year mortgage would also better align with today's life expectancy rate, according to the op-ed.

"There's no margin in the 30-year mortgage term — it was born during the Great Depression when life expectancy was also around 60 years. Today, with life expectancy nearing 80 years, a 40-year term aligns better with modern realities," Bryant said.

The difference in a monthly mortgage payment for a 40-year loan compared to a 30-year loan is 7% at current interest rates, according to Business Insider calculations.

Putting 20% down on a median US home price of $412,000 would result in a monthly payment of $1,930 for a 40-year mortgage, compared to $2,083 per month for a 30-year mortgage. The calculation excludes tax and insurance payments and uses the current 30-year fixed mortgage rate of 6.50% in both calculations.

However, the difference in monthly payments would be even more pronounced if mortgage rates decline from current levels, which is expected as the Federal Reserve prepares to cut rates in September.

The drawback of a 40-year mortgage compared to a 30-year mortgage is that even with a lower monthly payment, it would lead to more money being spend on interest over the lifetime of the loan.

But Bryan sees that drawback as a small one if it means more people could buy homes and start building equity.

"For many, the alternative is indefinite renting, which builds no equity and leaves families vulnerable to rising rents and economic displacement. A 40-year mortgage allows more people to begin building equity sooner, offering a pathway to long-term financial stability and sustained human dignity — a key element of the American Dream," Bryant said.

Bryant said a longer-term mortgage loan would help close the wealth inequality gap in the country and could even prevent a financial calamity like the 2008 Great Financial Crisis from happening again.

"This approach aligns with broader goals of economic sustainability. By focusing on financial literacy and responsible lending, we can avoid past pitfalls like the 2008 housing crisis, building a housing market that is inclusive, stable, and growth-oriented," Bryant said.

But while a 40-year mortgage would help lower monthly mortgage payments compared to a 30-year mortgage, it wouldn't address the consistent surge in home prices to record levels; in fact, it could even exacerbate it.

More homes need to be built to fix the key issue of soaring home prices, as Americans continue to grapple with a shortage of available homes to buy.

Read the original article on Business Insider
Симферополь

Авторский город «Листория» новый формат жизни в Симферополе

Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine

New York lawmakers are moving to shut down Elon Musk’s Tesla sales across the EV-friendly state

When will Liverpool lift the Premier League trophy?

Man arrested in San Leandro BART station stabbing

Punchestown Festival free bets: Get £30 in free bets and £10 casino bonus with BoyleSports, plus big offers every day

Ria.city
Реклама
  • ИП Попов А.П.
  • ИНН: 602715631406
Ревматолог: "29 апреля 2024 в г.Колумбус запущена квота"

Каждый человек с больными суставами имеет право получить...






Реклама
  • ИП Попов А.П.
  • ИНН: 602715631406
Ревматолог: "29 апреля 2024 в г.Колумбус запущена квота"

Каждый человек с больными суставами имеет право получить...


Реклама
  • ИП Попов А.П.
  • ИНН: 602715631406
Ревматолог: "29 апреля 2024 в г.Колумбус запущена квота"

Каждый человек с больными суставами имеет право получить...

Read also

5 things to know this Tuesday, April 29

Bonnie Blue ‘BANNED by Premier League club and escorted out of stadium’ after offering to give fans a ‘good time’

I did up my council house garden on a budget – trolls fume I got ‘taxpayer subsidised housing’ when I have spare cash

News, articles, comments, with a minute-by-minute update, now on Today24.pro

News Every Day

Man arrested in San Leandro BART station stabbing

Today24.pro — latest news 24/7. You can add your news instantly now — here


News Every Day

Punchestown Festival free bets: Get £30 in free bets and £10 casino bonus with BoyleSports, plus big offers every day



Sports today


Новости тенниса
WTA

Елена Рыбакина разгромила Бьянку Андрееску во втором круге турнира WTA-1000 в Мадриде



Спорт в России и мире
Москва

Челябинские росгвардейцы обеспечили безопасность полуфинала «Кубка Гагарина»



All sports news today





Sports in Russia today

Москва

«Наваждение» Ирины Винер и Зарины Мухитдиновой: премьера, которую невозможно пропустить


Новости России

Game News

Hexblade might the best 1-level dip in Baldur's Gate 3, but going the distance with a full 12 levels and their infinite necrotic ghost turrets has me fixing to finally beat the game without multiclassing


Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine

Реклама
Top 6 nutrition questions men should ask themselves after 40

To maintain health and remain full of energy, men will be helped by this

Реклама
Top 6 nutrition questions men should ask themselves after 40

To maintain health and remain full of energy, men will be helped by this

Russian.city


Москва

Собянин: в майские праздники городские службы продолжат работу


Губернаторы России
Сергей Брановицкий

Ротация на Радио Новые ПЕСНИ — размести свою Песню!


Военэксперт Шурыгин: Индия закупает французские самолеты из-за санкций против РФ

В Москве прошел чемпионат России по грэпплингу среди студентов

В Москве прошел чемпионат России по грэпплингу среди студентов

Собственная эко-философия, объемное озеленение и новации в ландшафте: чего еще ожидают современные покупатели новостроек от благоустройства?


«Все очень красиво, кроме дороги»: Певица Слава раскритиковала дорогу в Челябинской области, а трассу Оренбург - Орск назвала хорошей

Московский суд взыскал с певицы Агузаровой долг за коммуналку

Валентина Иванова объявила о беременности — Тимати в шоке

Анастасия Волочкова подралась с женихом дочери и сбежала со свадьбы


Соболенко вышла в ⅛ финала турнира WTA-1000 в Мадриде

Бублик о победе над Рублевым: он лучше меня во всем, но я творец, художник

Александрова победила Касаткину на турнире в Мадриде

Мария Саккари разгромила Паолини в третьем круге турнира WTA-1000 в Мадриде


Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine


Akon: легенда возвращается! Концерт в Москве уже этим летом

В 2025 году Отделение СФР по Москве и Московской области оплатило больничные и декретные 2 400 индивидуальным предпринимателям

Технологическое сотрудничество России и АСЕАН: новые горизонты для бизнеса и инноваций

Ответственность за Родину, готовность и желание действовать: Сергей Кириенко рассказал об эмоциях участников марафона Знание.Первые


В Москве прошел чемпионат России по грэпплингу среди студентов

Вторая лига А. «Ленинградец» против «Челябинска», «Кубань» принимает «Спартак» Кострома

Экс-игрок Мостовой: думаю, что "Краснодар" должен удержать преимущество в РПЛ

В Москве прошел чемпионат России по грэпплингу среди студентов


Столица выставила на торги три коммерческих помещения в Южном Бутове

Музей рукописей Льва Толстого создадут к юбилею писателя

Экс-главу «Фестивальной дирекции» заподозрили в краже денег из фонда президента

В администрации Ачинска подвели итоги субботников и обсудили посадку 80 деревьев ко Дню Победы


Реклама
Top 6 nutrition questions men should ask themselves after 40

To maintain health and remain full of energy, men will be helped by this


Путин в России и мире
Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine





Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine



Реклама
The most beautiful beach towns with cheap living

A huge number of people around the world dream of one day breaking out of the daily routine

Персональные новости Russian.city
Тимати

Возлюбленная Тимати показала видео с реакцией рэпера на ее беременность



News Every Day

Man arrested in San Leandro BART station stabbing




Friends of Today24

Музыкальные новости

Персональные новости