Why Housing Affordability Needs a Bigger Fix
Every few months, a new proposal surfaces to "solve" housing affordability. Recently, the buzz has centered on 50-year mortgages—longer-term loans designed to reduce monthly payments by stretching the repayment period. It makes for a catchy headline, but the truth is simple: a 50-year mortgage won't fix affordability because the American mortgage system itself needs a deeper correction across multiple layers.
Affordability is not broken because terms are too short. It's broken because the entire process—fees, regulation, rate structures, and market incentives—became bloated, inefficient, and misaligned over the last two decades.
Let's walk through the real issues.
1. The Mortgage Process Has Too Many Hands in the Cookie Jar
Over time, the mortgage process has accumulated more middle-participants, more fees, and more companies trying to monetize small slivers of the transaction.
A typical borrower is now paying for:
Title insurance
Escrow/courier fees
National Electronic Registry fees
Flood zone determination fees
Appraisals (often more expensive due to regulatory pressures)
Increased credit reporting charges
And dozens of "compliance-driven" verification steps
Technology should have reduced these costs, but instead new tools were stacked on top of old systems, creating more complexity instead of replacing it.
The Biggest Hidden Cost
Fannie Mae and Freddie Mac's fees for securitizing have increased over 300% since 2009, and they're passed directly to borrowers through higher rates and higher closing costs.
These government-controlled entities are generating massive profits—paid for by anyone who takes a mortgage.
2. Regulation: More Paper, More Cost, More Friction
In the name of consumer protection, mortgage regulation grew layer upon layer.
The result?
More paperwork
More delays
More third-party "checkers"
More compliance departments
And ultimately... higher costs for borrowers
Lending used to be simple: Assess risk → Price accordingly → Close.
That core principle has been buried under bureaucracy.
The goal should not be "less safety," but smarter simplicity:
Use technology for verification
Reduce redundant steps
Unwind outdated rules that no longer serve consumers
Until regulation is modernized, affordability will remain strained regardless of the loan term.
3. Mortgage Rates—The Real Driver of Affordability
Here's the uncomfortable truth: Mortgage rates determine affordability far more than the term length.
Rates are not set by the Fed. They are set by the supply/demand dynamics of mortgage-backed securities (MBS).
Between Federal Reserve policy, Treasury debt issuance, and global fixed-income demand, rates have been stuck at a stubborn floor.
To break through that floor, we would need:
A catalyst in bond markets
A shift in risk appetite
A realignment of Fed policy toward neutral
Or major changes in how MBS are purchased and held
If rates fall meaningfully, affordability improves instantly.
4. Adjustable-Rate Mortgages as a Smart Alternative
ARM loans, especially 7-year and 10-year fixed ARMs, offer lower rates than 30-year fixed loans.
But many consumers avoid them because the media still attaches them to the toxic loans of 2004-2008.
Here's the reality: Those dangerous negative-amortizing, quick-adjusting "Option ARMs" no longer exist.
Modern ARMs:
Are fully underwritten
Do not negatively amortize
Have fixed periods for 7-10 years
Come with strict caps on adjustments
Offer lower payments when affordability matters most
An ARM can reduce payments more effectively than stretching a loan term.
5. Insurance Costs Are Out of Control
Even if rates improve, insurance premiums are crushing buyers, especially in high-risk states.
Carriers need a reset in how they model risk and price policies. Until then, homeowners will continue to see premiums rise.
Loan term has nothing to do with this. But affordability absolutely does.
6. Longer-Term Mortgages Won't Solve the Problem
A 50-year mortgage is not new—versions of it have appeared before and never gained traction.
Why?
Because no one keeps their mortgage that long. The average U.S. mortgage lasts 4-8 years before the home is sold or refinanced.
All the dramatic "interest paid over 50 years" calculations circulating on social media are misleading—they assume a fantasy scenario where someone holds the same loan half a century. It doesn't happen.
Housing Affordability Needs a True Reset
Affordability will not be solved by stretching a flawed system over a longer timeline.
It will be solved through:
Lower mortgage rates driven by healthy MBS markets
Reduced regulatory friction
Lower government agency fees
Smarter, streamlined title and lending systems
Re-introducing smart ARM products
Using modern technology to reduce redundant costs
Fix the structure, not the timeframe.
The housing affordability crisis won't be solved with gimmick loan products. Real solutions require addressing the structural inefficiencies, excessive fees, and regulatory bloat that have made homeownership increasingly expensive over the past two decades.
