White House plan would let Americans tap 401ks for down payments

President Trump will issue a plan next week for letting Americans tap their 401(k) retirement accounts for a down payment on a home, a senior White House official said Friday, the latest in a series of proposals floated by the administration to address persistent anxiety over the cost of living.

Kevin Hassett, director of the National Economic Council, said on Fox Business that Trump will put the plan out at the World Economic Forum in Davos, Switzerland, next week.

“We’re going to allow people to take money out of their 401(k)s and use that for down payment,” he told Fox Business Network in an interview, adding that President Trump “will put the final plan out in Davos next week.”

Hassett, who said he would be traveling with the Republican president to the economic conference in Switzerland, added that they were still looking for “a simple” way to allow the fund move so that it would not hurt people’s retirement plans.

The expected plan comes as Trump grapples with economic headwinds a year after taking office and ahead of November’s midterm election, having campaigned on a quick fix to higher prices for American consumers.

US housing affordability in particular has remained a top issue as high mortgage rates and elevated home prices have sidelined many would-be buyers and slowed market activity.

Trump in recent weeks has offered a number of proposals, including banning institutional investors from buying single-family homes and instructing the Federal Housing Finance Agency to purchase $200 billion of bonds issued by mortgage finance giants Fannie Mae and Freddie Mac in a bid to bring down mortgage rates.

He has also repeatedly called on the Federal Reserve to lower its benchmark rates. Consumer inflation data released by the Bureau of Labor Statistics this week showed housing inflation remained strong.

Investors have been eyeing policy moves, market shifts or lower interest rates that could draw buyers back and lift mortgage application volumes after a prolonged housing slowdown.

A lot of these economic difficulties are too large and widespread not just in the US, but the entire West, to be solved with a single policy solution. That is why Mr Trump is looking for creative ways to ameliorate these persistent affordability problems.