White House National Economic Council Director Kevin Hassett joins ‘Mornings with Maria’ to explain President Donald Trump’s affordability agenda aimed at lowering housing prices, reducing credit card interest rates and boosting economic growth.
As the Trump administration has put housing affordability in the spotlight recently, one of the president’s top economic advisers has revealed how Americans can use their 401(k) savings to pay for their homes.
“The average monthly payment is almost double for the average family buying the average 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 lot of room for improvement,” National Economic Council Director Kevin Hassett told FOX Business’ Maria Bartiromo.
“We have a number of policies that will help people do that,” he continued. “The one you didn’t mention is that we’re talking about it, and the president is going to put the final plan in Davos next week, I’ll be flying up there with him, that we’re going to allow people to take money out of their 401(k)s and use that payout.”
White House Economic Adviser Director Kevin Hassett teased a new way Americans can use their 401(k)s for a take-home paycheck. (Getty Images / Getty Images)
Hassett was discussing Trump’s renewed proposal to direct his representatives to buy $200 billion in mortgage-backed securities, a move he said would help lower interest rates.
TRUMP FED CHAIRMAN FRONTRUNNER KEVIN HASSETT ADVICE ON THE FULLEST FEDERAL RESERVE
“Biden ignored the Housing Market, instead he got bogged down with high crime, Open Borders, runaway INFLATION, the Afghanistan Disaster, and the military he abandoned due to Chaos and Chaos,” Trump wrote on Truth Social last Thursday. “Everything was broken, but I, as the President of the United States, have fixed it!”
“Now, I pay special attention to the Real Estate Market. Because I chose not to sell Fannie Mae and Freddie Mac in my first term, a really good decision, and against the advice of the ‘experts,’ it is now worth many times that amount – AN ABSOLUTE FORTUNE – and has 200 BILLION DOLLARS IN CASH,” he continued. “Because of this, I am instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS. This will lower Mortgage Rates, LOWER monthly payments, and make home ownership more affordable.”
When asked if he had any concerns about tapping 401(k)s and hurting savings later in retirement, Hassett downplayed those concerns.
White House National Economic Council Director Kevin Hassett argues that President Donald Trump has shown ‘smart economic policy’ to ‘Kudlow.’
“What you have to do is come up with a way, so, a simple way. We’re still talking about the mechanics of it, but let’s say you put 10% down on the house, and then you take 10% of the home equity, and put it as an asset in the 401(k), then your 401(k) will grow over time,” he explained.
“As the value of your home increases, you’ll be healthier, have more money for retirement,” Hassett says, “and you’ll be able to solve the liquidity problem and get a home sooner.”
In general, Americans cannot withdraw funds from a 401(k) for a first-time home purchase without paying a penalty.
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PMG’s affordability principal Dan Coakley talks to Fox News Digital about what it might take to make housing affordable again across the country.
While there is a “first-time home buyer exception” that allows penalty-free withdrawals from IRAs, it does not apply to 401(k) plans. Those who withdraw cash before age 59½ typically owe a 10% early withdrawal penalty and standard income taxes, according to NerdWallet.
However, Bankrate notes that the most common strategy for accessing 401(k) funds without penalties is to take out a loan rather than cash out.
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