U.S. President Donald Trump makes a special address remotely during the 55th annual World Economic Forum (WEF) meeting in Davos, Switzerland, January 23, 2025. REUTERS/Yves Herman
(Davos, Switzerland) – President Donald J. Trump is expected to unveil a sweeping proposal aimed at easing the housing affordability crunch by allowing Americans to tap their 401(k) retirement accounts to help buy a home.
White House economic advisor Kevin Hassett outlined the plan in an interview on Fox Business, saying Trump will formally announce it next week at the World Economic Forum.
Under the proposal, first-time homebuyers would be permitted to withdraw funds from their 401(k) accounts to cover a 10 percent down payment. In exchange, buyers would shift 10 percent of the home’s equity back into their retirement account, allowing the funds to continue growing on a tax-deferred basis.
Administration officials argue the plan directly targets one of the biggest barriers to homeownership. According to housing surveys cited by the White House, roughly 30 percent of would-be buyers say saving for a down payment is the single largest obstacle keeping them out of the market.
Supporters say the idea could help younger Americans break into homeownership without permanently sacrificing retirement security, effectively treating home equity as a parallel long-term investment.
Critics, however, warn the proposal could expose retirement savings to market risk and housing downturns, while encouraging Americans to dip into nest eggs meant for old age. Others note the plan would require congressional approval, as changes to tax-advantaged retirement rules cannot be made unilaterally by the executive branch.
The announcement comes as housing affordability remains a dominant economic issue, with high interest rates, elevated home prices, and limited inventory continuing to squeeze buyers nationwide.
Trump’s team has framed the proposal as part of a broader effort to expand ownership and wealth-building opportunities for middle-class Americans — a message the president is expected to highlight on the global stage in Davos.
