Sealing the Deal (For Now)

The latest on the government shutdown... Reopening could be good for stocks in the short term... But it could be a rocky road ahead... Another alarming jobs report... A half-century mortgage?... What would really 'fix' housing...

It should be over soon...

By the time you read this, the government shutdown could be over.

On Monday, we said the longest partial federal government shutdown in American history could end this week after a framework agreement passed the Senate.

Tonight (at 7 p.m. Eastern time), the House of Representatives is expected to vote on sealing the deal.

Here are the details...

This agreement would fund the government until January 30 (when this whole thing might start all over again). Federal workers will get back pay, programs like food stamps will be funded again, and some Republicans in Congress have promised Democrats a vote on extending Obamacare tax credits in the future – the sticking point that started all this.

As for what really compelled Washington to end the standoff, it appears that air-traffic controllers held the cards (once again). Thousands of flights have been delayed or cancelled over the past five days, as a record number of controllers – working without pay for over a month – took unscheduled time off. At least some folks who would normally be guiding pilots were taking on second jobs as Uber and DoorDash drivers temporarily for income.

On Sunday, Congress suddenly became unfrozen – enough Democrats in the Senate voted against party leadership on a funding proposal. And everyone was happy to spend other people's money again. History repeats...

You may recall that similar air travel disruptions were the catalyst for ending the then-record 25-day partial government shutdown in December 2018 and January 2019, which was the second of the now three shutdowns during President Donald Trump's two White House terms.

The irony today is that delayed flights appear to be one of the reasons why the House of Representatives isn't voting on ending this record 42-day shutdown until tonight. As House Majority Leader Steve Scalise said on CNBC this morning about the whole situation...

It's madness, but it's going to end today, hopefully, and let's move on.

That's all we can do.

History shows a 'reopening' has been good for stocks in the short term...

As Stansberry Research senior analyst Brett Eversole shared in True Wealth Systems' Review of Market Extremes today, the government reopening could be good for stocks.

Since 1980, there have been 10 other government shutdowns involving federal worker furloughs. The S&P 500 Index outperformed its average in three-, six-, and one-year periods after these shutdowns, Brett wrote.

Since 1980, the U.S. benchmark index has returned an average of 2.3% over three months, 4.7% in six months, and 9.6% per year.

But after the end of a government shutdown, the index returned 4.6% on average in three months, 10.4% gains in six months, and nearly 13% gains over a year.

That said, it could be a rocky road ahead to get those returns...

Select Value Opportunities editor Mike Barrett wrote to his subscribers today to "get ready for a rocky 12 months in stocks." Mike is expecting a major low for stocks in the second half of 2026.

Mike shared an update on his four-year-cycle thesis and pointed to the weakening labor data and layoff announcements along with stock and bond investors' reactions to this news, which suggests they're getting nervous about the economy.

And we saw another alarming jobs report yesterday...

Yesterday, private payroll processor ADP published a four-week rolling average of private payrolls covering most of October – separate from its normal monthly report that showed 42,000 private jobs added in October (which, it turns out, is really a mid-month measure "built on a reference week that includes the 12th day of the month," ADP says).

Yesterday's update reported that private employers shed an average of 11,250 jobs per week through October 25, "suggesting that the labor market struggled to produce jobs consistently during the second half of the month" of October, the firm said.

So the labor market continues to weaken... and the private sector is eroding fairly fast by this measure.

In the meantime, "affordability" has become a buzzword lately (and another way of saying inflation). As we mentioned earlier this week, some folks in the White House are now floating a few ideas to "fix" things...

The White House's mortgage plans...

As we noted on Monday, Trump floated the idea of a 50-year mortgage in a post on Truth Social over the weekend. On Saturday, Federal Housing Finance Agency director Bill Pulte confirmed the plans – calling a 50-year mortgage a "game changer."

At its simplest, this is a way to try and boost affordability for homebuyers by lowering their monthly payment compared with the standard 30-year mortgage. As Realtor.com explained in an analysis of the 50-year mortgage...

Assuming for the sake of argument that mortgage rates were equal across both products, a 50-year mortgage would lower mortgage payments by about $250 per month on a $400,000 home, assuming 10% down and a 6.25% mortgage rate.

Now, $250 a month is a good chunk of change – $3,000 per year. That's plenty of money to fund a vacation, put in a savings account, or even invest.

But while a cheaper monthly payment via a 50-year mortgage may make homebuying more affordable up front, it will hurt borrowers in the long run compared with the standard financing now. Plus, as we'll explain, it just might make housing less affordable for others in the future.

First, a longer mortgage loan means it will take borrowers longer to pay off the home – and they'll pay much more interest to banks (especially early in the loan term) and build less equity with smaller principal payments. More from Realtor.com...

Total interest payments over the life of the 50-year loan would amount to $816,396, compared to $438,156 on the 30-year loan, a difference of $378,240. That amounts to 86% more interest over the life of the loan.

Yes, that's nearly double the amount of interest paid on a 30-year mortgage. That's just more debt for everyone.

As for a 50-year mortgage's effect on home "affordability" across the economy in general, it's questionable.

Realtor.com senior economist Joel Berner wrote that the longer loan terms would add to the potential pool of buyers without increasing supply. That would push home prices higher, wiping out any affordability increases from the lower monthly payment.

Berner added that low demand is not the problem for the housing market. Instead, there's a limited supply of homes, and that's keeping activity in the housing market under pressure.

Lower interest rates would help...

The Federal Reserve has been lowering rates over the past year. That has filtered into mortgage rates, though not dramatically enough to goose the residential real estate market.

The average 30-year mortgage loan today is around 6.2%. That's down from above 7% in January and a multiyear high near 8% in 2023, but rates need to go even lower to start juicing homebuying and selling again.

As we wrote in the October 16 Digest, that's because a large chunk of U.S. homebuyers are locked in to much lower mortgage costs...

Remember, a lot of homebuyers (or refinancers) from the pandemic era have mortgage rates well below current levels.

Approximately 55% of U.S. homeowners have a mortgage loan with a rate below 4% and around 80% have one below 6%. Those are incentives to stay put in a current home.

This should sound familiar...

Aside from rates, housing supply has been a huge issue for years. And our colleagues at True Wealth and True Wealth Systems have been on top of it. As Steve Sjuggerud explained in the April 2021 issue of True Wealth Systems...

Demand for homes is strong, while housing supply remains nearly nonexistent.

For example, this week, CNN reported on a Washington, D.C. home that received 88 offers within a four-day period. And 76 of those offers were to buy the house in cash.

More than four and a half years later, those factors are still in play – even with higher mortgage rates hurting affordability. According to a report from online real estate marketplace Zillow, the U.S.'s housing shortage has now hit 4.7 million.

Real estate management firm CBRE has a lower estimate of a 2 million home shortage. But that's still significant...

Put simply, we need to build millions of single-family homes or apartments to meet current demand for housing.

And a lot of that housing is needed at the entry level...

As CBRE showed in its report, there has been a huge demographic shift among homeowners in the past four decades. They're skewing older...

Back in 1980, 20% of homeowners were younger than 30 years old, while 43% were between 30 and 54, and 37% were older than 55 years old. As of 2020, the share of homeowners younger than 30 had plummeted to 11%, with all of that share going to the "over 55" demographic.

The median age of first-time homebuyers is now 40, according to a report from the National Association of Realtors last week. That's up from 38 just last year, and 35 in 2023. The median age of all homebuyers is 59, an all-time high.

Fixing that imbalance is usually where homebuilders come in...

But in August (the last available data before the government shutdown), homebuilders only started construction on 1.3 million homes (annualized). That's not nearly enough to make up the huge gap anytime soon.

In the September issue of True Wealth Systems, our colleague Brett Eversole highlighted that housing supply (as measured by months to meet demand) didn't spike as mortgage rates hurt demand in 2022 and 2023. From that issue...

But monthly supply remained under 4.5 months, less than its benchmark from the late '90s and early 2000s.

In other words, housing demand has proved inelastic... pointing again to a massive pool of homebuyers waiting on the sidelines.

So the demand is there. The obstacles have been 7% or 8% mortgage rates and limited supply in the market.

We've seen some progress on one of those fronts. As mentioned earlier, the 30-year fixed mortgage rate sits around 6.2% today. That's about the lowest rate since last September. That should continue to move lower as the Fed keeps cutting rates, though it's not a guarantee.

As for supply, it's off its record lows since the COVID-19 pandemic but is still right around its historical average.

At the end of the day, 50-year mortgages wouldn't provide a sustainable boost to the housing market. It won't do anything to fix the supply imbalance and could even push prices higher in the short term. That, on top of nearly doubling the interest payments over the length of the loan, could even make the home-affordability picture worse over time.

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In today's mailbag, feedback on a mailbag regular... and a note about Market Maven editor Gabe Marshank's new special report for subscribers: "A Veteran's Guide to Bubble Investing," which we discussed in yesterday's Digest... Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Hello, I don't know Sherwin R. personally but must admit I agree 100% of the time with his comments. Thank you for publishing them!" – Subscriber Erin W.

"To Gabe Marshank, Your update [on Monday in Market Maven] and analysis of bubbles was refreshing. I invested in an Alliance Membership ten years ago, so I get to tag along with your new service.

"I suspect many of your readers are like me. Worked hard, lived frugally and generally were blessed either with some good luck or not too much bad luck.

"We count on you and all the editors at Stansberry to keep us from shooting off our own body parts. With luck, your advice will help me put my three grandchildren through college or other yet to be defined institution!" – Stansberry Alliance member Mark T.

Corey McLaughlin comment: We appreciate the note, Mark. Keep all your parts intact! Cheers.

All the best,

Corey McLaughlin and Nick Koziol
Baltimore, Maryland
November 12, 2025