Terry Schilling is the president of American Principles Project. Jon Schweppe is a senior adviser at American Principles Project and former senior policy adviser at the Federal Trade Commission.
In 2025, a survey from the National Association of Realtors revealed that the median home buyer was 59 years old. That may sound like a shocking statistic, but it’s part of a trend. In 2020, the median home buyer was 47 years old, which at the time was also an all-time high.
Here’s another shocking statistic: The median down payment on a house in 2025 for first time homebuyers surpassed $40,000 — exceeding the median net worth of Americans under 35. Americans once went in search of their starter homes in their 20s, but today’s first-time home buyers are 40 years old on average. That is the affordability and the fertility crisis in a nutshell.
President Donald Trump, in a bid to address this generational crisis, has touted his administration’s deregulatory agenda to help spur home building. For years, construction in the U.S. has failed to keep pace with population growth. Some estimates put the shortage of homes at more than 5 million.
But that’s only one side of the problem.
Young families are the ones most likely to buy houses if they can afford it, which means the market needs solutions on the demand side of the equation as well. Luckily, a successful model already exists: Tax-free savings accounts patterned after the successful Health Savings Accounts model, which has already transformed how millions of Americans save for medical expenses. The president has already successfully used such an approach in education. His signature 2017 tax revision allowed Americans to use 529 college savings accounts to cover education expenses for K-12 students as well.
Under this system, Americans could contribute a set amount annually in pretax dollars — let’s say $10,000 — to a dedicated account. These funds could be invested in stocks, bonds or other assets, accruing tax-free growth. Tax-free withdrawals would be permitted solely for a down payment on a primary residence, or to reduce mortgage principal, including additional payments to build equity more rapidly and minimize interest expenses.
This isn’t a speculative policy idea. HSAs, enacted in 2003, have already demonstrated the efficacy of incentivizing individual savings. Enrollment in HSA-eligible health plans has surged, with nearly 39 million participants as of January 2024, an increase from about 32 million in 2019. That’s nearly 18 percent of commercial health plan coverage. The financial metrics underscore this success. By mid-2025, according to an HSA investment company, assets had grown to $159 billion across 40 million accounts, reflecting 16 percent year-over-year growth, while invested assets reached nearly $73 billion, up 30 percent. Accounts with investments averaged more than $22,000, almost nine times the balance of non-invested accounts, illustrating HSAs’ role as a potent vehicle for wealth accumulation. More importantly, HSAs have given poorer Americans more flexibility in the health care marketplace, rather than being left at the mercy of insurers and providers.
This same bottom-up approach can be applied to the housing market, allowing young people to afford homes without taking punitive action against seniors whose retirement savings are often tied up in the family home.
Politicians who want to support families and working people have a decision to make: Are homes for families, or are they yet another “investment vehicle” that is reserved for only the wealthiest people? Washington and Wall Street have failed this test for generations. Our housing policy rewards developers, landlords, investors and house flippers, and punishes young people trying to start a family and get ahead.
When young parents sell a starter home to accommodate the arrival of a new baby, they are forced to pay 15 percent capital gains on their property sale if the profits exceed $500,000. Investors, meanwhile, can upgrade tax-free thanks to 1031 exchanges, a loophole that allows landlords to endlessly defer taxes so long as they buy up even more “like-kind” property. Home Savings Accounts will level the playing field for families who find themselves bidding against real estate investors that see housing as a (profitable) road to serfdom rather than a place to raise children.
Homeownership is a central premise of the American Dream — take it away, and socialist vultures such as New York Mayor Zohran Mamdani (D), who made youth dissatisfaction with the housing market a central campaign theme, will take advantage and benefit electorally. This is how democracy works: If the reasonable party ignores a problem that people care about long enough, the people will happily vote for the radical who sympathizes with their plight.
Helping young people afford homes does not mean government interference in the form of rent control or other failed policies. Nor does it mean hurting those who have already built up equity in their homes. Home Savings Accounts offer a third way, a better way, to address the housing crisis and build a new generation of homeowners.
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