Trump’s proposal to allow penalty-free 401(k) withdrawals for down payments could boost homebuying but risk undermining retirement savings.

The Trump administration proposes allowing Americans to use their 401(k) funds for home down payments as housing costs soar, with details expected next week.

The Trump administration's proposal to let you tap your 401(k) for a house down payment already exists under current IRS rules. However, pulling money out comes with costly consequences.

Key Takeaways It took the typical American seven years to save for the median down payment for a house, down from the peak a few years ago but still above pre-pandemic levels.Down payments have gotten higher amid rising home prices,

Saving for a down payment remains one of the biggest barriers to homeownership in the U.S., even as housing market conditions show signs of improvement.

"It's a real struggle."

Recent data show how typical down payments have jumped since the pandemic for first-time and repeat homebuyers alike