Dave Ramsey: How Trump Is Impacting the Housing Market
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Jordan Rosenfeld
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Heather Taylor
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In a March episode of The Ramsey Show, financial experts Dave Ramsey and George Kamel responded to viewers’ comments about the state of the housing market, now that Donald Trump is president again.
Viewers were worried about what Trump’s election would mean for real estate, but Ramsey explained that consumers may be looking in the wrong direction to solve their real estate woes.
The Real Estate Market Is Thawing
Ramsey said that he and Kamel had predicted that the real estate market would begin to thaw sometime after the 2024 election. He had warned it would not be “instantaneous” and more likely to show movement by spring, and he’s feeling gratified by the results.
“So we are seeing in the real estate market an uptick in activity. We are seeing interest rates down very slightly, just a little bit,” he said at the time.
While there are no “dramatic” real estate shifts in the market, such as no major interest rate drops and there is still a shortage of available inventory, he said it’s moving a little bit. For example, on properties he has for sale, he’s suddenly seeing some interest.
Trump’s Impact on Housing
Ramsey asserted that people who are giving credit or blame to either Trump or former President Joe Biden for the state of the housing market are focusing in the wrong direction.
“[W]hat happens in your house is more important than what happens in the White House. And so Donald Trump’s not going to buy you a house. Joe Biden didn’t buy you a house. It’s not their job either, one of ’em,” Ramsey said.
He put the onus of buying a home on the consumer, saying it’s “your job to buy a house after you get out of debt, have an emergency fund, and when you can afford a payment on a fourth of your take home pay on a 15-year fixed rate” and claims it’s “very doable.”
However, he didn’t speak to how high inflation over the past few years has driven many costs up.
Tariffs and Home Prices
Ramsey noted that viewers are concerned about tariffs driving construction costs up, thus housing prices, but Ramsey scoffed at this, saying, “Tariffs aren’t going to drive construction costs up, not appreciably. Even if there are tariffs and there aren’t any yet [as of March 17].”
However, other experts disagree with Ramsey’s claim, suggesting that there’s a very good chance that the increased costs of lumber and other materials could be passed onto the consumer in the form of higher home prices and other home-related goods and services.
Making People Believe in the Economy
Ramsey said that “the White House” has less of an impact on real estate than people think, but did suggest that what a president can do is make people feel hopeful in the economy, which gets people to spend more money.
“If you believe, whether you’re a Democrat or a Republican, that the economy is going to get better, you’ll make moves that make the economy better. It’s a self-fulfilling prophecy,” he said. He included housing in that prediction.
He doesn’t credit presidents, but people, with economic prosperity. “I’m not going to give President Trump the credit for having grown the economy. I’m going to say the American public grew the economy.” However, he acknowledged that if Trump “gave them hope” through any policy actions, he’ll give credit where credit is due.
A Thriving Real Estate Market by Fall
Ramsey is predicting “a healthy, good functioning real estate market again by fall.” He does not believe the market will fall prey to a “boom or bust” scenario like it did after the COVID-19 pandemic’s early days.
Kamel piped up that people who have been waiting “on the sidelines for something drastic to happen” should quit waiting. “If you’re ready to buy a house, don’t time the market, time your own financial life.”
Date the Rate
Ramsey also urged people who are already in a position to buy not to wait for mortgage interest rates to fall, but to adhere to the adage, “Marry the house, date the rate.” This means that you should buy a house you can afford with the knowledge that you can refinance when rates drop. The reality is also that when interest rates drop, home prices tend to go up.
He did warn not to “buy too much house” or step outside of your affordability range, but that refinancing is a great way to get your money back.
20% Down Is Best
When possible, he urged buyers to make a 20% down payment to avoid having to pay private mortgage insurance (PMI), which Kamel qualified as a “risky buyer fee” that the banks use to protect themselves against foreclosure.
PMI is around $75 per $100,000 borrowed. So PMI on a $400,000 mortgage would be around $300 per month.
Don’t Let Presidents Dictate Your Decisions
Ultimately, Ramsey said that purchasing real estate should be something you do because you’re in the right financial position and you want the investment. Trump is neither going to “end the world” he said, or “make your life better by sending you money,” just as Ramsey said Biden wouldn’t. “You guys have got to be grownups and go for your own destiny,” he said.
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