Trump Rejects Proposal to Let Homebuyers Use 401(k) Funds for Down Payments

The president says he is not ‘a huge fan’ of the idea as retirement funds perform better than home values.

U.S. President Donald Trump speaks to reporters aboard Air Force One while traveling from Shannon, Ireland, to Joint Base Andrews, Md., on Jan. 22, 2026. Mandel Ngan/AFP via Getty Images

ZURICH, Switzerland—President Donald Trump said on Jan. 22 that he rejected a proposal to allow Americans to withdraw money from their 401(k) accounts for home down payments. He said that retirement funds typically outperform the housing market and prefers that individuals keep their savings in 401(k)s.

“I’m not a huge fan” of the proposal, Trump told reporters aboard Air Force One while returning to Washington from Davos.

“They’re talking about taking money out to put a deposit down in a home. And one of the reasons I don’t like it is that their 401(k)s are doing so well. You know, 401(k)s are up 80–90 percent in some cases,” Trump said.

“The housing market is good, but the 401(k)s are doing much better than the housing market.”

On Jan. 16, White House National Economic Council Director Kevin Hassett said Trump would likely announce the new plan at the World Economic Forum in Davos, but no announcement was made.

Hassett said that significant progress was needed to address the housing affordability problem, noting that the plan related to 401(k)s was one of many policies introduced to the president to help achieve this goal.

“We’re still talking about the mechanics of it,” he said during an interview with Fox Business on Jan. 16.

Hassett said that if homeowners withdraw money to put 10 percent for a down payment, they could then put 10 percent of a home’s equity into a 401(k) plan. As the home’s value goes up, he said, the 401(k) will grow, too.

In recent weeks, the Trump administration has introduced a range of proposals to help more Americans achieve homeownership, including bringing down mortgage rates and banning large institutional investors from buying additional residential homes.

In a Jan. 8 Truth Social post, Trump directed the purchase of $200 billion in mortgage bonds to help reduce interest rates.

“This will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable,” Trump wrote.

On Jan. 7, Trump also announced that he was taking steps to bar large investors from purchasing more single-family homes, and said he would urge Congress to codify it.

Institutional investors are defined as companies owning 1,000 or more properties. Blackstone is considered the largest private equity owner of U.S. apartments, with more than 230,000 units as of April 2025, according to data from the Private Equity Stakeholder Project.

Affordability of homeownership has become a growing concern, especially for first-time buyers.

Since the start of the COVID-19 pandemic, housing costs have rocketed. Median home prices have risen by nearly 55 percent, according to the National Association of Home Builders. Rents have surged by 35 percent nationwide, according to Zillow.

Borrowing costs also shot up in 2022 after the Federal Reserve raised interest rates to combat inflation.

The typical age of first-time buyers climbed to 40 in 2025, the highest on record, up from 31 in 2014, according to a report by the Center for American Progress.