By Steve Holland
ABOARD AIR FORCE ONE, Jan 22 (Reuters) – U.S. President Donald Trump on Thursday said he does not like the idea of letting people use 401(k) retirement funds for a down payment on a house, even though it was floated by his own chief economic adviser, Kevin Hassett.
Hassett told Fox Business Network last week the Trump administration planned to allow people to withdraw funds from their 401(k) accounts to fund home purchases. But Trump told reporters aboard Air Force One he was not keen on the proposal.
“I’m not a huge fan. Other people like it,” he said. “One of the reasons I don’t like it is that their 401(k)s are doing so well.”
Trump, a former real estate developer, said the retirement accounts were doing “much better” than the housing market.
The S&P 500, one of the most widely tracked stock indexes, gained 16.39% last year. The Nasdaq Composite Index rose more than 20%.
Trump, girding for losses in congressional elections this fall amid economic headwinds and growing public frustration over the cost of living, has made boosting home ownership rates and driving down interest rates a top priority.
U.S. housing affordability has remained a vexing issue for many Americans given high mortgage rates and elevated home prices have sidelined many would-be buyers and slowed market activity.
Trump on Tuesday signed an executive order to restrict large institutional investors from competing with individual homebuyers in an effort to make housing more affordable.
Trump has in recent weeks also instructed the Federal Housing Finance Agency to purchase $200 billion of bonds issued by mortgage finance giants Fannie Mae and Freddie Mac to bring down mortgage rates.
Trump has also repeatedly called on the U.S. Federal Reserve to lower its benchmark rates.
Recent consumer inflation data showed housing inflation remained strong.
Investors have been eyeing policy moves, market shifts and lower interest rates that could draw buyers back and lift mortgage application volumes after a prolonged housing slowdown.
But some analysts and economists say a key issue is a lack of supply, and that changes to local zoning and construction regulations could have a bigger impact. Lower rates, for example, could increase demand for homes and without more supply that would likely push prices higher.
(Reporting by Steve Holland, Andrea Shalal and Susan Heavey; Editing by Tom Hogue)
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