PORTSMOUTH, Va. — A growing number of Americans are entering the housing market for the first time; 21% of home purchases this year are from first-time buyers, according to the National Association of Realtors.
But as the cost of living climbs, policymakers and lenders are exploring creative ways to help more buyers achieve homeownership.
A recent idea has resurfaced on the national stage: a 50-year mortgage. The concept has drawn renewed attention after former President Donald Trump highlighted it as a potential solution to the housing affordability crisis.
Local families feel the pressure
For many families in Portsmouth, the dream of homeownership comes with difficult decisions and steep trade-offs.
Preston and Zsulaine Bain Ramirez purchased their Portsmouth home for $350,000, financed with a traditional 30-year mortgage.
“It’s 6.25% interest, and the monthly payment, including home insurance and property taxes, is about $2,600,” Preston said.
The couple is seeking a larger home, but Zsulaine said she worries about the long-term picture.
"Think about the future kids, like we got little kids, and it's already hard to even pay rent. And I think that's very important to keep in mind, not just people that already own real estate," she said.
Recent research from Harvard University’s Joint Center for Housing Studies echoes those concerns, noting that many U.S. households can’t afford homes currently on the market due to rising prices, stagnant incomes, and shifting market conditions.
Would a 50-year mortgage help?
To learn whether a 50-year mortgage could make a meaningful difference, WTKR reporter Kamilah Williajms spoke with Carrie Williams, branch manager at Revolution Mortgage.
“We’ve had considerations of a 40-year, but 30 years is your traditional mortgage,” Williams said. “The issue that most will take with the 50-year mortgage is that any time you extend the term of the mortgage, there’s more risk involved to the lender. So, therefore, there’ll be a higher interest rate.”
By the numbers: A $400,000 home financed over 30 years at a 6.5% rate results in a monthly payment of about $2,528 before taxes and fees, with the loan paid off in 2055. On a 50-year loan, at a 7% rate, the monthly payment dips slightly to about $2,406, but the borrower would be paying until 2075, saving only about $122 a month but paying significantly more in interest over the life of the loan.
Mortgage policy and qualifying remain obstacles
Even if longer-term mortgages become more widely available, qualifying for one could still be a challenge, especially for buyers without strong credit.
Williams said another potential solution is reevaluating so-called “loan-level price adjustments.”
“About four years ago, Fannie Mae and Freddie Mac instituted more restrictive, harsher loan-level price adjusters,” she said. “Those are milestones or indicators of the interest rate based off credit score mainly, and some are also dictated by the amount of down payment.”
She believes that easing those adjustments could have an immediate impact.
“If we were able to remove some of these harsher loan-level price adjusters, we would see an instant improvement to conventional interest rates of at least a quarter percent,” Williams said.
Advice for buyers
Williams encourages residents to review all their options. Adding that there is value in owning a home, and you have options when it comes to mortgage loan rates.
As Preston and Zsulaine Bain Ramirez continue their search, their story reflects a larger challenge facing families across the country: navigating a tight housing market, weighing new financial products, and making decisions that will shape their futures.
