Why House Prices Are Not Coming Down

[Music] brought to you by Y Refi refinance your defaulted private student loans today at yrefi.com/ramsey today's question comes from Ethan in South Carolina he says "My wife and I are both 28 and just got married i am an employee benefits consultant and she is a trauma nurse together we make about 200,000 before any commissions that I receive we also are debtree we have about 150,000 in investments 30,000 in a money market account and are investing our 15% towards retirement very good if I were your son how would you recommend buying a house we have been waiting for interest rates and housing prices to drop but I always hear there's never a perfect time to buy is now the time for us to jump in yeah Ethan I think you're feeling the way a lot of people are feeling that are in your shoes right they're saying "Okay these interest rates are high should I wait?" Like truthfully I have the money or I could start to save up more money but I don't know is now the right time and I would say the right time to buy a house is when you can afford it like not based on the market not based on interest rates otherwise you're trying to like play a timing game but if you can afford to save the down payment and you can afford to get a mortgage where the the payment is no more than 25% of your take-home pay all in then get the house and later on if mortgage rates go down you can always refinance right like there's you have options you don't have to stay in that high interest rate so for you guys I think this is great you have a great income it sounds like you've got your 3 to 6 months of expenses you are investing um yeah you're doing really really well at this point I would start saving up because it sounds like the 30,000 you have in the money market is your emergency fund and you should not use your emergency fund as a down payment so I just want to make that clear 15,000 in investments unless that's retirement you can use that yeah that's good that's a good point Dave it doesn't say but if that 150,000 is in like stocks or just kind of like a brokerage sitting there you could definitely use that and I would Yeah okay interest rates are going to do what they're going to do we don't know house prices are not coming down we do know that there's a serious shortage of housing there are more buyers than sellers and there's no fix on the horizon for that that's called a supply demand pressure it's seventh grade economics when there is a shortage of anything the price holds steady or goes up it does not go down and interest rates don't cause it to go down so interest rates have been up for about 18 months and house prices have not gone down okay it's that simple the median house price is exactly what it was 12 months ago it's 400,000 nationally and it's not going anywhere so that's what you're seeing uh so don't wait on house prices to come down so marry the house and date the rate mhm you can refinance your interest rates if they go down or pay them off and have a zero interest rate that'd be cool but um and if you want to get a pulse on what's going on in the market and you want to start learning more and leaning into that that process and learning you should visit our real estate home base because you can go on there and I mean it's just chalk full of all the information that you're going to need to kind of see what's going on learn about areas that you don't feel as confident in and ultimately get set up with one of our Ramsey trusted real estate agents that can help you through the entire process so that's what I would do if I were your in your shoes or if you were my son which is yeah perspective is the thing so I'm old so I've been walking around in the middle of this stock market thing for 40 plus years i've been walking around this real estate thing for 40 plus years and and let me tell you I every year I've been on the air for over 30 years talking about this every year someone says "Oh the stock market's artificially high it has to come down what goes up must come down hadn't done it went down a little bit here and there but came back up more and it went down and can you imagine if you had invested 32 years ago in a growth stock mutual fund how much that would have gone up oh man oh and let me help you with this 1978 I sold my first house for $42,500 as a real estate broker i was 18 years old can you imagine if you owned that house from 1978 that that guy paid $42,500 for man you understand that's an $800,000 house now but they they they have to come down um No they don't nope they don't and they never have there's no historic data that indicates that so date the rate marry the house get a house bought when you have the money and if rates come down and you can get a cheaper rate than 5% which is so freaking high i don't know how I don't know how you people are surviving i love when you talk about the 80s man but yeah it's whining about 5% but anyway yeah it's because it's compared to three instead of compared to 12 if it was 12 and it went down to five everybody'd be celebrating there'd be Migra in the streets but instead it went from three to six and down to five and everybody's "Oh god we're dying." Yeah okay so you better get a house because the next round of real estate prospering these houses are going to shoot up again so if you're ready to get a house go get one why refi refinances delinquent private student loans for struggling borrowers learn more at y fy.com/ramsey