A recently released report from Middle Tennessee State University suggests that a 50-year mortgage, a concept recently proposed by the White House, is not a viable solution to address growing concerns about housing affordability.
The Consumer Research Institute in MTSU’s Jones College of Business lays out its reasoning in its fall edition of the Tennessee Housing Market Report, in which the institute “has compiled and analyzed data to provide a unique perspective on the housing market, aiding real estate professionals, mortgage lenders, and consumers.”
While a 50-year mortgage might sound appealing because it lowers your monthly payment, the institute counters that stretching a loan over 50 years “dramatically increases the total interest cost and only minimally decreases your monthly payment,” states report author Michael Peasley, director of the Consumer Research Institute.
Under a 50-year mortgage vs. a 30-year mortgage (payment calculated with a 3.5% down payment and a 6.25% rate on 30 years and a 7% interest rate on 50 years):
- A $300,000 home will cost an additional $403,400 in interest, while saving only $40/month.
- A $400,000 home will cost an additional $537,910 in interest, while saving only $54/month and taking 31 years to pay off $100,000 in principal.
- In the first two decades, nearly all your payment goes toward interest, not principal.
- The homeowner will stay in debt practically for life, likely well into retirement.
Residential price trend index increased again in 2025
Adjusting to the seasonality of the real estate market, the median sales price currently represents a 2.2% year-over-year increase from 2024, the report states.
As of Sept. 1, the median price in the U.S. is $440,004, compared to $394,700 in Tennessee. Broken down by region, median prices are:
- $487,000 in Middle Tennessee.
- $389,900 in East Tennessee.
- $268,000 in West Tennessee.
Prices are expected to drop slightly over the next few months, with January and February historically being the most affordable months to purchase a home. There are currently 4.2 months of inventory on the market in Tennessee, representing a neutral market, down from 5.3 months in January (a buyer’s market) and up from 3.2 months of inventory in the spring of 2025 (a seller’s market).
Monthly payments remain higher
The Housing Cost Indicator tracks mortgage payments and rent across the United States, Tennessee, and its three major regions.
In Tennessee, mortgage payments have increased by 125% since January 2021. The median mortgage payment in Tennessee is now $2,017, lower than the June median payment of $2,115, but higher than the September 2024 median payment of $1,875.
Middle Tennessee consistently shows the highest mortgage payments, surpassing both the state and national averages.
At the same time, West Tennessee maintains the lowest mortgage payments in the state.
Rent indicator
The Rent Indicator tracks rent prices across the United States, Tennessee, and its three major regions. Overall, rent prices have followed a period of stabilization and mild fluctuation since the significant increase in 2021 and 2022.
Middle Tennessee consistently shows the highest rent levels, surpassing both the state and national averages at several points. West Tennessee maintains the lowest rents throughout the period, while East Tennessee and the state average fall between the two extremes.
In addition to this report, the Consumer Research Institute collects data throughout the year to measure Tennessee consumers’ and business leaders’ perceptions of the economy, which can be found at https://mtsu.edu/consumer.
For more information, contact Peasley at michael.peasley@mtsu.edu.
— Jimmy Hart (Jimmy.Hart@mtsu.edu)