President Donald Trump on Thursday said he’s “not a huge fan” of a proposal his administration is developing that would allow prospective homebuyers withdraw from their 401(k) retirement accounts for a down payment.
“I’m not a huge fan,” Trump told reporters on Air Force One while preparing to return from his trip to the World Economic Forum in Davos, Switzerland. “Other people like it. They’re talking about taking money out to put a deposit down on a home.
“One of the reasons I don’t like it is that their 401(k)s are doing so well. You know, 401(k)s are up 80%-90% in some cases,” the president said. “The housing market is good, but the 401(k)s are doing much better than the housing market.
“I like keeping their 401(k)s in great shape,” Trump added. “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. We’ve got people telling me they’re up 88% and over the period of a year, a full year. It’s going to be, I mean, it’s going to be close to 100%.”
President Donald Trump said he’s “not a fan” of the 401(k) withdrawal plan because retirement accounts have seen strong returns. (Denis Balibouse/Reuters)
Trump’s comments come after the administration previewed the 401(k) down payment proposal last week as part of a broader push by the White House to improve the affordability of homeownership.
National Economic Council Director Kevin Hassett told last week that the “typical monthly payment about doubled for an ordinary family buying an ordinary home. And the down payment they needed to buy a home went from about $15,000, to about $32,000. And, so, there’s a real lot of room to make up.”
The Trump administration discussed a plan that would allow 401(k) withdrawals for home down payments. (iStock/Getty Images Plus / Getty Images)
Hassett went on to say that “we’re going to allow people to take money out of their 401(k)s and use that for a down payment,” adding that the proposal would be unveiled during the president’s trip to Davos.
During his address to the World Economic Forum, the president didn’t mention the 401(k) down payment proposal and instead focused on other aspects of his affordability agenda.
Trump discussed his call for Congress to set a 10% cap on credit card interest rates for one year and cited rising credit card debt as a challenge to Americans trying to save for a down payment.
NEC Director Kevin Hassett floated the 401(k) down payment plan the week before Trump’s Davos trip. (Al Drago/Bloomberg via Getty Images)
The president also discussed his plan to restrict institutional investors from buying homes, which he blamed for pushing housing prices higher and said is “just not fair to the public.”
Trump’s proposed credit card interest rate cap has drawn pushback from the financial services industry, which has warned that a cap on interest rates would restrict consumers’ access to credit and cause many existing cardholders to either lose their cards or see rewards and perks eliminated.
Investors have also critiqued the president’s plan to block firms from purchasing single-family homes.
They note that it would likely push prices even higher as the policy wouldn’t expand the supply of housing and that corporate investment has helped with the construction of new homes and broadening the supply available on the market.