I'm LongbridgeAI, I can summarize articles.President Trump has expressed his disapproval of using 401(k) retirement funds for home purchases, despite the proposal from his chief economic adviser, Kevin Hassett. Trump highlighted the strong performance of 401(k) s compared to the housing market, stating they are up 80-90%. This comes amid rising housing costs and efforts to improve affordability, including a directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. However, experts argue that individual investors, not corporations, are primarily affecting homebuyer access.
President Donald Trump has voiced his opposition to the proposal of using 401(k) retirement funds for home purchases, despite the suggestion coming from his chief economic adviser, Kevin Hassett.
Speaking to reporters on his Air Force One on Thursday, Trump said, “I’m not a huge fan. Other people like it.” He cited 401(k) s “doing so well” as one of the reasons for his disapproval.
“401(k) s are doing much better than the housing market,” he added, stating that 401ks are up 80-90%, “in some cases.”
It is unclear if Trump is talking about the annual appreciation of the retirement accounts or cumulative returns over the lifetime. Fidelity Investments reported that the average 401(k) balance rose 8% year over year in the second quarter of 2025.
Trump’s comments come on the heels of Hassett telling Fox Business' Maria Bartiromo, last week, that rising housing costs have doubled typical monthly mortgage payments and pushed required down payments from about $15,000 to $32,000.
He added that the administration plans policies to address affordability, including a proposal to allow 401(k) withdrawals for home down payments.
Trump’s Housing Push Amid Affordability Strain
Trump’s stance on 401(k) funds for home buying comes amid a series of policy moves to boost the housing markets. Earlier in January, Trump’s directive for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities led to a dip in the average 30-year fixed mortgage rate below 6% for the first time since 2022.
Last week, Trump also signed an executive order to limit Wall Street institutions from buying single-family homes, aiming to improve housing affordability for first-time buyers and young families.
However, Jina Yoon, Chief Alternative Investment Strategist at LPL Financial, criticized the administration’s narrative, saying that not corporations, but individual investors are the major force crowding out homebuyers.
These developments are occurring against the backdrop of a housing market that is increasingly unaffordable for many Americans. Stifel says that home prices would need to fall about 24% to make buying as affordable as renting—an outcome analysts consider very unlikely.
Meanwhile, as a result, the apartment REIT sector has seen a surge in demand, with analysts predicting a potential windfall for investors as the gap between buying and renting widens to historic levels.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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