Trump Just Dumped His Plan To Let You Use Your 401(k) for a Down Payment: What Now?
Written by
Travis Woods
Edited by
Jenna Klaverweiden
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Despite the fact that President Donald Trump had previously suggested allowing Americans to withdraw from their 401(k) retirement accounts in order to pay the down payments on home purchases, he is now signaling an abrupt change of course.
So what changed, and what could that mean for homebuyers?
Also see how Trump’s housing plan could affect first-time buyers.
What Changed?
Returning from the World Economic Forum aboard Air Force One, President Trump told the press corps, “I like keeping their 401(k)s — I’m not a huge fan of putting down a deposit. I’m not. I’m so happy with the way 401(k)s are doing … They’re talking about taking money out to put a deposit down on a home. And one of the reasons I don’t like it is that their 401(k)s are doing so well.”
This statement comes as something of a shock, as utilizing 401(k)s to buy homes was previously a key component of Trump’s bid to assuage the affordability concerns of everyday Americans, per Bloomberg. Recently, White House economic advisor Kevin Hassett stated that President Trump would announce his full 401(k) homebuying plan during his February State of the Union speech; now, it seems the plan has been shuttered altogether.
What Does This Mean for Homebuyers?
So what does this mean for homebuyers?
Essentially, it’s likely things will remain as they are for now. 401(k) plans will go untouched, and the current affordability gap in American housing — low mortgage rates, but high housing prices with low availability — will likely continue.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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