Sometimes the boss just doesn't like your idea. President Donald Trump shot down a proposal from his own chief economic adviser Kevin Hassett to allow Americans to raid their 401(k) retirement accounts for home down payments.
Speaking to reporters aboard Air Force One on Thursday, Trump kept it simple: "I'm not a huge fan. Other people like it." His reasoning? Retirement accounts are "doing so well" right now.
"401(k)s are doing much better than the housing market," Trump explained, claiming that 401(k)s are up 80-90% "in some cases."
That figure raises some questions. It's unclear whether Trump meant annual returns or cumulative gains over time. For context, Fidelity Investments reported that the average 401(k) balance actually rose 8% year over year in the second quarter of 2025. That's solid, but nowhere near the numbers Trump cited.
The rejection comes just days after Hassett floated the idea on Fox Business with Maria Bartiromo. He pointed out that rising housing costs have doubled typical monthly mortgage payments and pushed required down payments from roughly $15,000 to $32,000. The 401(k) withdrawal proposal was meant to address that squeeze.
Housing Policy in Overdrive
Trump's dismissal of the 401(k) idea doesn't mean the administration has given up on housing. Far from it. Earlier in January, Trump directed Fannie Mae and Freddie Mac to purchase $200 billion in mortgage-backed securities. That move helped push the average 30-year fixed mortgage rate below 6% for the first time since 2022.
Last week, Trump also signed an executive order aimed at limiting Wall Street institutions from buying single-family homes. The goal was to improve housing affordability for first-time buyers and young families.
But not everyone is buying the narrative. Jina Yoon, Chief Alternative Investment Strategist at LPL Financial, pushed back on the administration's focus on corporate buyers. She argued that individual investors, not corporations, are the real force crowding out ordinary homebuyers.
The policy flurry comes as housing affordability hits historic lows. Stifel analysts say home prices would need to fall about 24% to make buying as affordable as renting. They consider that scenario very unlikely.
The rental market is benefiting from this dynamic. The apartment REIT sector has seen surging demand, with analysts predicting potential windfalls for investors as the gap between buying and renting reaches unprecedented levels.
