Monday, July 15, 2024
HomenewsRFK Jr. reveals ambitious plan to cut mortgages by $1,000 a month

RFK Jr. reveals ambitious plan to cut mortgages by $1,000 a month

Robert F. Kennedy Jr., who’s running in the Democratic primary alongside President Joe Biden but is currently trailing behind him by a huge margin, has announced his plan to cut mortgage rates by $1,000 a month.

“I have a plan that will lock home loans at 3 percent interest for first-time homebuyers, lowering your mortgage payments by $1,000 a month—and it won’t cost the government a cent,” he wrote on X, formerly known as Twitter, on Thursday. “Check it out,” he added.

In a clip shared with the social media post, RFK Jr.—as he’s widely known—talks of housing as “probably the most important issue in terms of building wealth in poor communities.”

“If you have a house, you can get a loan and you can build a business. If you don’t have a house, you have no access to capital,” he said. RFK Jr. then mentions how the average cost of homes in the U.S. has skyrocketed in recent years, an issue that he blamed on inflation, the money spent “on wars” and on the health emergency linked to the COVID-19 pandemic, and corporations acquiring residential properties.

In fact, house prices ballooned because of a surge in demand during the pandemic, when the market boomed amidst relatively low mortgage rates and limited inventory. This jump in price led to a crisis of affordability which reached a peak last summer, when demand finally started to slide down as many aspiring homebuyers found themselves squeezed out of the market entirely by high prices and suddenly rising mortgage rates.

According to the latest data by the Federal Home Loan Mortgage Corporation, better known as Freddie Mac, the U.S. 30-year fixed-rate mortgage rate—the most popular among American borrowers—surged to 7.49 percent on Thursday, up from 7.31 percent last week and 6.66 percent last year.

The solution to the problem of affordability in the housing market, for RFK Jr., is lowering mortgage rates. And the way he’ll do that is by “making a mortgage available to Americans at 3 percent interest,” he said.

“I’m going to do that without raising the debt,” he added. “And the way I’m going to do it, if you have a rich uncle who will cosign your mortgage, you can get a very cheap mortgage because the bank is basing interest rates on his credit score rather than yours.”

“I’m going to give everybody a rich uncle. I’m going to say, Uncle Sam is going to cosign this new class of mortgages and guarantee them at 3 percent. That will lower the cost of mortgages by a thousand dollars a month.”

The way RFK Jr. is going to fund these mortgages? By selling “tax-free bonds on the open market,” according to the presidential candidate.

He specified that these mortgages will only be available to first-time homebuyers who live and work in the communities where they want to buy a home.

According to the latest data available on FiveThirtyEight, dated October 1, RFK Jr. has 16.4 percent of the Democratic vote against Biden’s 61.2 percent.

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