Real Estate the Ramsey Way - The State Of Real Estate - Expert Dishes On Housing Crisis

Episode Date: September 7, 2026

Dave Ramsey and real estate expert, Brian Buffini, break down the current housing market, including where home prices are headed, what recent appreciation numbers are showing, and how assumable mortgages could create opportunities for buyers in today’s market. Next steps: ·   🏠 Not sure what to do next when buying or selling your home? Check out our ⁠⁠Real Estate Home Base⁠⁠ for free tools and resources to guide your next steps. ·   🏠 And if you’re ready to buy or sell your home, ⁠⁠connect with a RamseyTrusted® real estate agent⁠⁠. They’re experts who’ll help you confidently navigate homeownership the way we teach. Explore more from Ramsey Network: 💸 The Ramsey Show Highlights 🧠 The Dr. John Delony Show 🍸 Smart Money Happy Hour 💰 George Kamel 📈 EntreLeadership   Ramsey Solutions Privacy Policy

What would you say for the average start family? Because I mean, I look up homes. So the average home in America is about 428. I think it's good to take out the two coasts, right? I mean, I live in San Diego. It changes the math. It changes a big time. I agree.

I agree. So I think you're looking at the latest numbers. And Zillow, again, they're not friends of Brian Affini. So they position numbers because they have certain programs going, right? So you're probably looking at your typical starter home is about $2.90. Okay. So it might be about $100,000 more. The dynamic that we're seeing is this.

There's more inventory than we've seen in the last seven years. Okay? There's more houses for sale, which means prices are starting to soften. Prices are starting to flatten. This is the time, and you guys were talking earlier on, but the lady listened to social media. If you're a buyer and you're listening to social media, there is no hope. Give up. Everybody's giving up.

That's the thing to do. Rent is your friend. The math's not mathing. And that's not true. Now is the time to be making sure you're doing the Ramsey program. You're saving the money. You're eating spaghetti. you're doing it. Because if you really want a house, you've got a sacrifice.

Get out of debt. Don't buy a car. Don't buy a car. Just so you know, every first time buyer, drive a hearty. They buy a car before they buy out of debt. Why can't I get a house? I have a $1,200 car payment. Right. And that is why. That is the typical thing. So you've got to keep grinding. The second thing, there is dynamics out there. I was talking to you guys offline. 23% of all mortgages in the United States are consumable. Now, they're specifically. They're FHA and VA. and you were on the radio a few years ago, a few months ago, talking about this. No, I screwed that up about two weeks ago. I'd said they're not assumable, and I got hammered for it because I was wrong.

Well, you were right and you were wrong. You were right when it comes to conventional. Conventional loans are not assumable. None of them are, they used to none of them be assumable with the rates, but you can take an FHA or a VA and they'll keep the rates. So here's the thing. If you're a military person, you go to the listing and say, if find me as someone who's in the military selling their home,

and you can take over the average loan on an FHA VA is 3.2%. FHA, which is the number one first-time buyer home. So let's say someone's a first-time buyer. They bought a home, they fixed it up, it's worth more, it's going up in value. They're going on to buy a conventional house. They're going to get a conventional loan. The FHA loan that's on their house is assumable. You've got to qualify, so you have good credit, or you got the down payment, you're cleaned,

you're good, you got no stupid car payment. You can go get an assumable loan on a VA or an FHA loan. And you're not paying the current, you know, 5.6% on a 15-year fixed. You're getting a 3%. Right. And 90% of them are getting a 6.8, Dave. You know?

Most of them are getting 30 years. I mean, your plan is better. It's right. It's the only way to save money. But the typical buyer... Right, is out there doing that, yeah. It's 6.8. And I think for the first time home buyers, we were just running numbers in the break.

You know, if you make 100 grand, which is a little bit up than what the average or what the median household income is, your starter home is going to be around that 270, 300, which is, you know, you're, you know, You know, that's around what you're saying even that that's correct, right? That should be your first. But it's going to take longer to save. And if that 270, $300,000 house is not in the neighborhood you want, good school district. Right? If you have kids, like all of it, it's going to take you longer. And I feel like that's one of the most frustrating points about this.

It might take you longer to drive to work. Yeah. Because you might move three counties out or two counties out. Yeah. My first home was on Texas Street in San Diego. And we were three weeks married. moved into the new home, and Beverly goes, what are those fireworks I hear in the distance? It weren't fireworks.

It's just, yeah, they're celebrating here in inner city San Diego. You know what? We fixed it up. We made it worth more. We sold that house, and I got it to another neighborhood that didn't have fireworks, right? Yes, yes. So, you know, you got to start somewhere. You got to fight, fight, scratch, and claw.

You got to fight. I'll just say this. there is the average homeowner has 46 times a net worth of the average renter. Young people are deciding to stay renters. That's a way to stay broke. Fight, bite, scratch, and claw. Here's the, I was showing you guys, people like, here's this little graph for those who can see it.

Look at this thing. The green is the amount of years and the last 75 years that real estate went up. Okay? And here's the red. And the red, four of them, five of them were the Great Recession. So it's gone down six years and 75. That's a pretty good investment. So it's not going anywhere.

Now, the beautiful thing for people, it's only going to go up gradually the next few years, and the incomes are going up at a higher rate. Even more, which is great. Yes. So, get, the current inflation rate of real estate nationwide is around 1%. Yep. Yep. And the current wage growth is around three and a half.

Three and a half. Okay. Give it four years. Yeah. So if you say wages don't match real estate prices, that that's going in the right direction. Yes, which is great. That's going to help the issue. Yes, that's a very helpful thing.

change if you have unrealistic expectations to get an executive position in the first two years in your contract. And get an executive house. Yes. If you want a 5,000 square foot home in a premium neighborhood, you can't afford that if you make $80,000 a year. Right. Right. And I think that that's the hard part is when it when it when it when the rubber meets the road and you're looking at your income, you're working hard. Right. You're paying for daycare. I mean like we get these callers in and they are they are they are trying so hard to do well. And it's. And it's, and it's, and it's, And when the facts come out, yes, your feelings are going to follow. It's going to be frustrating.

We're like, man, this is less than what we were expecting, right? And so there's that reality that you have to live in for a bit. And then once you kind of get over that hump, right, of what you're saying, you fight hard. Get in the market. And then you could look up in four years and be in a totally different place with your income, your job, your house, everything. I told me, I was a house painter, right? My dad was a house painter. And my first house, I told my wife, it was fine.

five-star accommodations because you could see five stars through the hole in the roof. And so we fixed it up. We made it better. Right, right. And then we sold it and we made the next one better and we made the next one better. And the next thing, you know, you wake up one day and you've got millions of dollars in equity in real estate. And that's the American dream.

But to get there, what you're saying is the plan. Like if you still have student loan payments, you still have two car payments and credit card debt, it is going to feel almost impossible to try to be a homeowner today. You don't. You get that stuff cleaned up. That's right. And that's what we say is to this. You shouldn't buy a home if you're in that mess.

That's right. You should clean the mess up first because the home's not going to be a blessing. It's going to be a curse. So you get out of debt, you build your full of emergency fund, you save for a good down payment, you adjust your expectations of location. And generally that means you're going to go a little bit further out. And the further out you go, the more house you can buy in most markets. One out of every 10 homes in America is sold to my clients.

We tell every member we have in a real estate business to get every first-time buyer, buy them a copy of total money makeover. I was walking my son through the building today, and I go, I don't know how many hundreds of thousands of copies of that book I've sold. Because, and why am I here today, apart from our friendship, is it's the best stuff out there to get people on the path. And in the motto, oh, Dave is old school and chew your credit cards up. Let me tell you, that old school works today, tomorrow, 50 years from now.

Get out of debt, get the student loans gone, don't drive the old car by something to park it in front of. Yep. Now, when you do that, okay, so if you're sitting there and you clear your debt and then you get ready to buy a house and you go look at what you can afford and you don't like it. Now, you've got two choices. Remain a renter or buy that home that's not fancy that I don't like and get started. Ten years from now, which will be the best route for your wealth building and your family? Buy the house that you don't like.

For sure. That's what you're saying. I used to send out a postcard to neighborhoods and says, your landlord says, as high, and thanks again for paying his mortgage. My wife and I got married a little less than three years ago. We bought a house, put 30% down, we eliminated all our debt, except for the house. We still owe $448K on the home, and I really want to try and pay that off as soon as possible. About a year ago, I started saving, saved up about $130K,000.

I was hoping to put that into the principal, refinanced. rates are still not great. So I'm asking about the idea of recasting the loan to save about $900 a month and then keep putting that into the home as well. What's your income every month and what's the mortgage? The mortgage is $3,800 and our combined income after retirement. You can just give me after taxes, but don't include all the retirement and health care because that'll kind of muddy the waters for us. Okay. You might have to do some manual math.

Yeah, so take home actual is about 10K for us a month. Okay. So that mortgage is taken up a good chunk of your income, like 38%. Yeah. But you've been saving all this money to, are you doing it for the purpose of recasting? Is that why you saved up the money? Yeah, I was hoping to put it into the principal, and if rates went down, I would refinance, but if they didn't, I was thinking maybe a recast could, get that monthly payment down to where I could save money on the interest,

maybe put that back into the home. Yeah. I mean, technically it will. All it's doing is applying it to the balance and then recasting the math to go, okay, now your mortgage payment is lower. The balance is still the same. The terms are still the same. So it's sort of artificially making you feel better.

But if you currently make your mortgage payment, the same thing is happening. You're paying the extra 900 toward the principal right now. Oh, I thought that was going towards the interest. You'll see on your amortization schedule how much is going towards principal and interest, but it's not like a magic trick. It's not necessarily going to cause you to pay off the house faster. Okay. Because if you just take your current mortgage and make extra payments, you'll knock it out. And so that's where I'm asking about the mortgage comparatively your take-home pay.

It's a lot of your take-home pay. You guys bought too much house, and I'm glad you have this lump sum. It can sort of make it closer to that 25%, I'm assuming if you applied it. But what I would have done in hindsight is just make extra payments to the house. the mortgage instead of socking it up in savings on the side. Oh, okay. And the recast will cost you a couple of hundred bucks, and it gives you some, if it gives you some peace of mind and you do see that lower payment good, but I don't want you to stop

from making extra payments and get too comfortable with that lower one. Yeah, yeah. I think we want to get this thing paid off, you know, within 10 years. So either way, we're going to get this thing gone from our lives, I think. Good. That's awesome. I remember this. Every payment you make towards the principal balance

drops the total amount of interest you're going to pay on that loan. Okay, yeah, true, of the course. Because they're going to charge interest on what's there. Yeah. Okay. Yeah, so then maybe I'll still put the lump sum towards principle and maybe keep it. That's sort of, I'm hoping that just sort of gets you to that 25%

mark, but I still would use all the margin you can to throw it at the mortgage if you guys are in Baby Steps 4, 5, 6. I assume you are. Am I correct? Yeah, we're in 6. We have no debt, and we're fully funded emergency fund and a good chunk in retirement as well. Awesome. Yeah, I would be investing 15% of your total household income. Do you guys have kids? No, not yet. Okay, so you can skip Baby Step 5 and then you're on to 6, put an extra on the mortgage. Yeah. How long did it take you to save up the $100 grand? It took me about $130.30 was about a year. Wow. How did you save that much?

We don't really – well, we don't have any other expenses, really. We don't have any car payments, and we don't even really have an electric bill, because one of the debts that we knocked out when we first got married was a solar bill, which was $30,000. We knocked that out when we got married. You said you're bringing home about 10K a month. So how did you save up $130.30 in a year, mathematically? Yeah, I mean, we just didn't. I think there were a couple bonuses as well in there.

Well, your savings muscle is fantastic. I would just retool that to go like now this is the mortgage payoff muscle. And so every dime you were going to put in savings for that mortgage lump sum, I would just throw it at the mortgage because seeing that balance go down does something for you, psychologically. And once that mortgage goes down to 200 and then to 100,000, now it's under six figures. Now you can see the finish line. That's when it gets real. So I would say to even a more aggressive goal for someone in your shoes, five to seven years. Let's knock out this mortgage. How cool would that be? Take your wife on a date, dude. Take her on a date. It's time.

It's time. John can sense it's been a while since we've hit up in Olive Garden. A lot of these calls could have been solved by connecting with a Ramsey trusted agent. We don't want you to make the same mistake. To find a trusted agent near you, go to ramsysolutions.com slash agent.