As the holiday season approaches and everyone gets ready for Santa’s arrival, the housing market is watching a different kind of wish list: what the Federal Reserve will decide to do with interest rates at its meeting on December 9–10. Recent months have been anything but typical, with a 43-day government shutdown delaying key reports on inflation, jobs, and consumer spending, forcing the Fed to lean on alternative data to understand what is really happening in the economy—Chair Jerome Powell even likened it to “driving in the fog.”
Core inflation, which excludes food and energy, is still running near 3%, above the Fed’s 2% target, and new tariffs have added upward pressure to prices, complicating the path forward. At the same time, Powell has sounded cautiously optimistic on inflation while becoming more uneasy about the labor market, describing a softer environment where job creation has slowed, some employers are freezing hiring or trimming staff, and the risks to employment have risen even if conditions have not deteriorated sharply.
Because of the shutdown, the jobs data the Fed usually relies on has been delayed and piecemeal, adding to the uncertainty. The long-awaited September jobs report finally arrived in mid-November and showed that employers added about 119,000 jobs—slower than earlier in the year but better than many had feared—while the unemployment rate ticked up to roughly 4.4%, suggesting a cooling but still functioning labor market; October’s full report is now delayed until mid-December, after the Fed meets.
With the data picture so murky, markets and prediction tools have stepped in to handicap what might happen next. One of the most closely watched prediction platforms, Polymarket, currently reflects a strong consensus for a modest cut, with only a very small chance assigned to a larger 50-basis-point move and a dominant probability placed on a 25-basis-point decrease at the December meeting, similar to the odds range reported in recent financial coverage.
For buyers and sellers, all of this means that December could bring meaningful movement in borrowing costs right as people are gathering for the holidays. Whether rates hold steady or ease a bit, there will be opportunities for well-prepared clients on both sides of the table, and staying informed—and ready to act—will be key. As always, this December newsletter comes with warm wishes for a joyful holiday season to you and your family, and a reminder that any questions about how these shifts affect your real estate plans are always welcome.
As 2025 winds down, the conversation around homeownership is shifting from “Can I find a home?” to “Can I ever afford one?” With the Trump administration floating the idea of 50‑year mortgages and renewed interest in portable mortgage options, it is worth unpacking what these concepts could mean for buyers, sellers, and the broader market.
Why these ideas are on the table
The median age of the first-time homebuyer has now climbed to about 40 years old, the oldest on record. Some of this is lifestyle—people are marrying and starting families later—but a big driver is simple math: home prices have far outpaced wage growth, and saving a down payment while rents and living costs climb has become harder than ever. At the same time, U.S. life expectancy hovers in the high‑70s, which makes the length of a mortgage a real lifetime planning question.
Layer in mortgage rates that have settled around the 6% range, with most forecasts calling for only a modest drift toward the mid‑5s over the next few years, and you get a generation squeezed between high prices, higher rates than 2020–2021, and limited inventory. That is the backdrop for both 50‑year loans and portable mortgages.
50‑year mortgages: lower payments, longer commitments
The core “pro” of a 50‑year mortgage is simple: stretch the loan over 600 months instead of 360, and the monthly principal and interest payment falls, sometimes meaningfully.
Potential benefits:
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Better affordability at the door: Lower required payments can pull the entry point for ownership earlier, especially in high‑cost markets where a typical 30‑year payment is out of reach for many younger households.
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More room for life’s other costs: For families balancing student loans, childcare, or variable 1099 income, the flexibility of a smaller minimum payment can reduce financial stress.
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Strategic prepayments: Self‑employed or commission‑based earners can view the 50‑year term as the “floor” payment and use good income years to make lump‑sum principal payments, effectively shortening the loan and cutting interest on their own timeline.
However, the trade‑offs are real:
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Much more interest over time: Paying a loan back over 50 years means paying interest for 20 extra years; even at the same rate as a 30‑year, the total interest outlay is dramatically higher.
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Owning free and clear becomes rare: With life expectancy around 77–78, someone would need to buy in their late 20s to have a realistic shot at paying off a 50‑year loan before retirement. For many, that creates the feeling of “renting from the bank” for most of their life.
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Slower equity build: Because principal is paid back more slowly, owners rely more on appreciation and extra payments to grow equity, which can limit options if prices flatten.
As with any tool, the key is fit: a 50‑year mortgage might open the door for buyers who are currently shut out, but it demands a clear strategy for prepayments and long‑term planning.
Portable mortgages: taking your rate with you
Portable mortgages are a different idea: instead of changing the length of the loan, they aim to let you transfer your existing mortgage (or at least its rate) from one property to another, subject to lender guidelines.
Why they matter now:
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Many owners hold 2–3% “Covid‑era” rates from 2020–2021 and are understandably reluctant to trade those in for a new loan in the 5–6% range.
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Industry data and surveys suggest that once the gap between a homeowner’s current rate and the market rate hits roughly 2 percentage points, people become significantly less willing to move—this “rate lock‑in” is one reason inventory has been so tight.
What portability could do:
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Free trapped move‑up buyers: If owners could take their existing rate onto a new home, it would be easier to justify moving to a more desirable neighborhood, a fully remodeled home, or closer to family—even if the new home is similar in price.
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Unlock inventory: Allowing people to move without losing their rate would likely bring more listings to market, easing some of the inventory crunch that keeps prices elevated and competition intense.
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Smooth payment shock: Instead of jumping from, say, 3% to 6%, a portable structure could preserve much of the benefit of that original refinance or purchase, making monthly costs more predictable.
In markets like greater San Jose, where demand is strong and inventory is thin, this matters even more. Nationally, home prices have continued to climb at roughly 3% annually, but in 2024 the broader San Jose area saw around 9% appreciation across local sub‑markets—putting additional pressure on buyers and effectively pricing out would‑be homeowners every day inventory stays constrained.
What this means for you
For buyers, 50‑year mortgages could lower the monthly hurdle and bring homeownership into reach sooner, but only with eyes wide open about the long‑term interest cost and the need for a payoff strategy. For current owners sitting on ultra‑low Covid‑era rates, portable mortgage ideas speak directly to the emotional and financial friction of giving up a once‑in‑a‑lifetime rate just to make a needed life move.
If these concepts move from policy talk to real products, the winners will be the households that treat them as tools—not magic solutions—and align their mortgage choice with how long they expect to stay, how stable their income is, and how aggressively they want to build equity in a world where 3% mortgage rates are unlikely to come back anytime soon