This week’s issue presented by Ridge Lending Group
What happened…
Trump floated 50-year mortgages as a fix for housing affordability. The goal: cut payments so buyers can squeeze into overpriced homes. But the math says otherwise. On a $400K home, a 50-year term only saves $119/month.
Takeaways…
$119 shaved off the monthly payment — not enough to rescue the average buyer.
50-year terms = banks get 20 more years of interest. Nice for them.
Mortgage debt now stretches into your 80s — longer than most car loans last.
Affordability crisis still rooted in 60%+ home price growth since COVID.
Credit risk rises if buyers scrape in with zero cushion and decades of exposure.
Explain Like I’m 12…
It’s like buying a Ferrari with a 20-year loan. Congrats — you got the keys. But blink twice and you’re still making payments in retirement.
What this releases…
Watch lenders test this quietly with new “ultra-term” products before it’s policy.
Spot the headlines: affordability “solved” while prices rise another $40K.
Why it matters…
Entry-level buyers may cheer — but they’ll pay double in interest over time.
Builders and banks win if longer loans justify higher prices and more volume.
Backroom breakdown…
This isn’t about helping buyers. It’s about keeping the market hot without cutting rates. The message: you’ll own nothing fast, and pay forever.
Real estate angle…
Longer loans prop up prices and make every seller look smarter. But it’s a warning to investors too: if affordability now = gimmicks, it’s a fragile floor. Also means comps stay inflated — so cash buyers and investors may need to sharpen their discount models.
Move or miss?
Run your buy-box through a 50-year amortization. If the only way your deal works is by doubling the loan term… it doesn’t.
→ Want better options than FHA fiction? Try LoopholeLending.com — the private money source most agents won’t talk about. Or… get tactical support (CashFlowSavvy.com) before policy and Fed cuts push comps higher.
Lurking in the Shadows:
👟 Shutdown Ends, But the Data Damage Is Done
The 43-day federal shutdown is over, but it left a hole in the economy’s dashboard. Key stats — CPI, payrolls, housing starts — were frozen. 750,000 federal workers were furloughed midstream.
💡 Why you should care: Investors and policymakers are still flying blind — and bad data makes bad bets.
👟 Fed Cuts Again, But Flies Into Fog
The Fed slashed rates to ~3.9%, second cut in two months. But with missing data and jobless claims rising, even Powell admits they’re “navigating in fog.”
💡 Why you should care: Soft landing bets just got riskier — especially for buyers banking on cheap money.
👟 Bitcoin Crashes Below $100K After Rally High
After touching $126K in October, Bitcoin tanked 18% in a month, wiping out $450B. One-day liquidations hit $1.3B — most since 2022.
💡 Why you should care: Fast-money exits like this can spook markets and vaporize down payments overnight.
On The Radar…
👤 Dalio: U.S. Debt = “Time Bomb”
Debt jumped from $37T to $38T in weeks — fastest peacetime spike ever.
📉 Burry Bails on His Own Fund
Scion Capital closed. His $9.2M Palantir short was no typo — he's out.
⤵ Home Sales Hit 30-Year Low
Only 2.8% of homes sold this year. Market’s not cold — it’s frozen.
🧑🏭 Jobs Market Softens Quietly
Unemployment hit 4.4%, a 4-year high. First real crack in the “no landing” story.
📈 Dow Hits 47,928. Bubbles Brewing?
SoftBank dumped $5.8B of Nvidia. Even insiders smell froth.
🥇 Gold Nears Record: $4,245/oz
Investors piling in. 60% gain in 2 years says inflation hedge demand is back.
🖇 The Connection
Rates can fall and demand can rise — but prices won’t meet incomes until supply moves. And supply only moves when owners must sell or builders can build. Right now, neither is happening.
The Fed cut to ~3.9%. Mortgage rates slipped to 6.19%. Unemployment climbed to 4.4%. All the classic signals say housing should loosen up. But turnover is still 2.8%, the lowest in 30 years, and listings won’t budge.
Because the choke point isn’t rates. It’s supply. And supply only shifts two ways:
(1) owners get forced to sell, or
(2) builders can profitably build what buyers need.
Owners aren’t selling. 70%+ sit on sub-5% mortgages. Their payments are too good to give up. And job losses haven’t climbed enough to trigger distress.
Builders aren’t building either — at least not the homes that matter. Entry-level single-family homes now cost too much to produce. Land, labor, lumber, and financing eat the margin. So builders stick to bigger, pricier homes. That leaves the starter-home deficit untouched.
It’s like lowering ticket prices for a concert with no open seats. Cheaper tickets don’t help if nobody leaves and the venue can’t add chairs.
#️Number of the Week
2.8%
Only 2.8% of U.S. homes changed hands this year — lowest turnover since the 1990s.
At this rate, you’re more likely to swap spouses than houses.
🎯 The Hit List!
✅ Test Terms
Run your deals through a 50-year amortization.
If that’s the only way it pencils, it doesn’t.
✅ Track Cuts
The Fed’s now at ~3.9%, with two straight cuts.
Borrow cheaper — but don’t assume cheaper means safer.
✅ Watch Turnover
Home sales froze at 2.8%.
Listless supply props prices but crushes flips and new entries.
✅ Avoid FOMO
Bitcoin lost $450B in value in weeks.
If you didn’t buy at $126K, maybe sit this one out.
✅ Hedge Bubble
Dow hits 47,928. SoftBank sold $5.8B of Nvidia.
Insiders cash out first. Make sure you’re not the liquidity.
🚪 Closer
Only 2.8% of homes sold this year. Apparently, mortgage rates aren’t the only thing locked in.
