Fake News: “Trump to make homes more expensive for the middle class.”

Some keep harping on Donald Trump’s recent executive order to reverse a planned cut in FHA PMI (private mortgage insurance) rates as “making homes more expensive for the middle class”. What they really meant to say is: “Homes will now be more expensive for those who shouldn’t be buying them in the first place because they don’t have a sufficient down payment saved”.

This isn’t really a difficult one, folks. Just a classic case of creating misleading headlines designed to grab the attention of those who don’t care to read or think much, especially those prone to pre-existing biases (or those who have genuinely been led to believe that you don’t have to pay for things).

Take your pick of a few different online sources for this story if you missed it:

On His First Day in Office, Trump Raises Taxes on Middle-Class Homebuyers
https://theintercept.com/2017/01/20/on-his-first-day-in-office-trump-raises-taxes-on-middle-class-homebuyers/

In First Hour, President Trump Delivers ‘Punch in the Gut to Middle Class’
http://www.commondreams.org/news/2017/01/20/first-hour-president-trump-delivers-punch-gut-middle-class

Barbara Boxer: We Have To Make The Middle Class Understand That Trump Is Not Their Friend
http://www.realclearpolitics.com/video/2017/01/25/barbara_boxer_we_have_to_make_the_middle_class_understand_that_trump_is_not_their_friend.html

Trump’s Mortgage Fee Cut Reversal: What it Really Means for House-Hunters
http://www.foxbusiness.com/features/2017/01/24/trumps-mortgage-fee-cut-reversal-what-it-really-means-for-house-hunters.html

In reality, by repealing Obama’s last-minute reduction in private mortgage insurance costs for FHA loans (typically used to buy homes with as little as 3.5% down), homes will remain just as affordable as they were before for everyone else with a 20%+ down payment, maybe even a little more so because all the “subprime” buyers they’ve been competing with, driving up prices, will now be forced to the sidelines while trying to save a little more money. Not a bad thing. Maybe that will actually cause prices to slip a bit – meaning that 20% suddenly becomes a little closer within reach for those still working to get there. Imagine that – markets functioning according to the laws of supply & demand, as mother nature intended. Take the time to do the math, and you just might realize the middle class isn’t necessarily getting such a bad deal after all. Patience can be a virtue, too.

A case of disagreeing on what it means to be “middle class?”. Or a case of disagreeing on the privilege that cheaper debt (but more of it) really affords?

Perhaps, at the end of the day, a few better options for headlines might be:

“Trump to make homes just a little bit easier to buy for middle class folks who’ve worked and saved enough to afford them.”

“Trump to make it slightly less appealing for the middle class to take on more debt.”

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