Dave Ramsey: ‘It’s a Really Weird Time To Buy’ a Home — Here’s Why You Still Should
Written by
Yaël Bizouati-Kennedy
Edited by
Cory Dudak
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Financial guru and host Dave Ramsey told a caller on his namesake show that while now “is a really weird time to buy a home,” they still should.
On the Dec. 11, 2023 episode of his podcast, Ramsey was asked by a caller whether they should buy a home now or wait for mortgage rates to come down.
George Kamel, Ramsey’s co-host, called it a “classic conundrum,” and akin to timing the stock market. Kamel said, “The best time to invest in the stock market is when you have the money to invest, versus trying to figure out if it’s going to go down or up.”
Ramsey agreed, stating that people can always buy now and refinance later. “It’s a really weird time to buy, but there’s nothing wrong with buying right now,” he said. “If you wait two years, prices are going to be more. And if you buy now at a higher rate and the rates come down, just refinance. So marry the house, date the rate.”
He added that “you’re not married to the mortgage, you’re married to the house,” and if you keep on waiting for prices to go down, you might wait long. His rationale is that the rate is temporary, it’s not a permanent decision and no one has to keep a mortgage. Refinancing is also an option when rates go down.
The combination of high prices, low inventory and high interest rates has left many potential homebuyers on the sidelines. After hovering around an eye-popping 8% for several weeks, as of Dec. 14, 2023, the average 30-year mortgage rate fell below 7% for the first time since August 2023, according to Freddie Mac data.
Although it stood at 6.95%, it’s still higher than the corresponding weeks in previous years. According to Freddie Mac, interest rates in the same week were 6.31% in 2022; 3.12% in 2021; and a substantially lower 2.70% in 2020.
Realtor.com economist Jiayi Xu noted that while mortgage rates have mirrored the easing in longer-term rates, their levels remain elevated. “Notably, approximately two-thirds of outstanding mortgages feature rates below 4%, and over 90% have rates lower than 6%,” said Xu.
The disparity between today’s higher market mortgage rates and the lower rates that existing homeowners benefit from on their current mortgages, commonly referred to as the lock-in effect, is expected to play a role in maintaining low inventory levels.
“As home shoppers compete over the still-limited inventory, prices are expected to stay elevated, maintaining affordability as a top concern,” added Xu.
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