We need a Marshall Plan to tackle Americas housing crisis

Homeownership has long been part of the American dream, but that dream has been deferred.Households in their 30s have an ownership rate of just 42% —more than 20 points lower that the national average.The median age of all home buyers is a record-breaking 59, and the age of a first-time buyer is 40 — up from 29 in 1981.As a solution, the Trump administration is floating a 50-year mortgage.Though I disagree with that specific idea, I am heartened that they are brainstorming ways to tackle the problem.We need a Marshall Plan for housing, a collection of broad initiatives to make homes more affordable and put the dream back on track.

The federal government can use its bully pulpit to get changes to red tape and regulations that are holding back building, and encourage policies that would increase housing and decrease costs.To start, the White House and Fannie Mae should instead promote shorter, 20-year mortgages.As Ed Pinto of the American Enterprise Institute has argued, a 20-year loan can be paid off “when the 30-year-term loan leaves most homeowners saddled with another decade or more of mortgage payments, the cash flow freed up from a paid-off shorter-term loan is available to fund a child’s post- secondary-education needs and later turbocharge one’s own retirement.”The 20-year loan could be incentivized with a first-time buyer tax credit.

This would be especially important today when the vast majority of taxpayers no longer itemize their tax returns — which means they cannot avail themselves of the deduction for mortgage interest.That deduction always favored wealthy buyers of high-end homes anyway — so a targeted tax credit would help those who actually need it far more.It’s time, as well, for the Trump White House to roll back one of the key initiatives of Elizabeth Warren’s pet project, the Consumer Protection Financial Agency.

The CPFC has pressured banks to limit mortgages to “plain vanilla” mortgages, premised on its rules or what ...