What does Dave Ramsey say about buying a house right now?

Editorial team Published on

Dave Ramsey says that if you are financially ready, now is a good time to buy a house because home prices are not expected to drop.

📅 Market Outlook & Timing

  • Prices won't fall: Ramsey argues that a housing shortage keeps pushing prices up.
  • "Date the rate": He advises buyers not to wait for interest rates to drop.
  • Refinance later: Buyers can purchase now and refinance if rates decrease in the future.

✅ Financial Prerequisites

  • Zero debt: Pay off all consumer debt (credit cards, cars, student loans) first.
  • Emergency fund: Save 3 to 6 months of living expenses.
  • Down payment: Put down 20% to avoid private mortgage insurance (PMI), though 5% is the absolute minimum for first-time buyers.

📊 Mortgage & Budget Rules

  • 15-year fixed only: Reject 30-year mortgages and adjustable rates.
  • 25% rule: Total monthly payments (principal, interest, taxes, insurance, HOA) must not exceed 25% of monthly take-home pay.
  • Stay put: Plan to live in the home for at least 5 years.

Should I buy a house now or wait until 2026?

You should buy a house now if you can afford the monthly payment and plan to stay for several years, as outlined in this Opendoor guide.

Why Buying Now Makes Sense

  • Rates are stabilizing: Mortgage rates are hovering in the low-to-mid 6% range.
  • Prices keep rising: Waiting often means higher prices and more competition if lower rates bring back other buyers.
  • Equity starts early: Paying a mortgage builds wealth, while rent does not. You can also watch expert breakdowns like this YouTube video for more context.

When You Should Wait

  • Bad finances: Wait if your credit score is low, your debt is high, or you lack emergency savings.
  • Short-term stay: Wait if you plan to move within three years.

Does Dave Ramsey recommend buying a house?

Dave Ramsey does recommend buying a house, but only after you meet strict financial readiness rules. Long-term, he views homeownership as a great way to build wealth and stability, provided you do not buy a home you cannot afford.

Financial Prerequisites

  • Be completely debt-free: Pay off all consumer debt, including credit cards, student loans, and car payments, before buying.
  • Have an emergency fund: Save three to six months of living expenses in cash, separate from your down payment.
  • Save a down payment: Aim for 20% down to avoid private mortgage insurance (PMI), though he allows a minimum of 5% for first-time buyers.

Mortgage and Budgeting Rules

  • The 25% Rule: Your total monthly house payment—including principal, interest, property taxes, home insurance, private mortgage insurance (PMI), and HOA fees—must be at or below 25% of your monthly take-home pay.
  • 15-year fixed-rate only: He strictly discourages 30-year mortgages, FHA loans, or VA loans, endorsing only a conventional 15-year fixed-rate mortgage.

Is Dave Ramsey a Trump supporter?

Yes, Dave Ramsey supported Donald Trump, explicitly endorsing and stating he would vote for him in the 2024 U.S. presidential election.

Endorsement and Reasons

  • Policy Alignment: Ramsey stated on his show that he compared the platforms of Trump and Kamala Harris on issues like taxes, immigration, foreign policy, and gun rights, concluding that Trump aligned with more of his views.
  • Not a Perfect Fit: He noted he did not agree with everything Trump stood for, describing his vote as holding his nose and picking the candidate who checked more boxes.
  • Indifference to Backlash: Ramsey dismissed potential pushback from listeners, stating that he owned his media company and could not be canceled.

Subsequent Policy Criticisms

Despite his support, Ramsey has openly criticized specific proposals from Trump. He panned the federally backed "Trump Accounts" (child investment accounts proposed under legislation) as a political stunt, advising parents to rely on traditional options like 529 plans or Roth IRAs instead.

What salary to afford a $400,000 house?

To afford a $400,000 house, you generally need an annual household income between $90,000 and $150,000, depending on your down payment, interest rates, and local taxes.

General Affordability Guidelines

Financial experts often use the 28/36 rule to measure home affordability:

  • Housing costs: No more than 28% to 30% of your gross monthly income should go toward your monthly mortgage payment, property taxes, and insurance.
  • Total debt: No more than 36% to 43% of your income should go toward all debt combined (including car loans, student loans, and credit cards).

Salary Estimates by Down Payment

Assuming a 30-year mortgage and a 6.5% interest rate, the required income changes based on how much money you put down upfront:

  • 5% down ($20,000): Requires an annual gross income of roughly $130,000 to $160,000, as you will also pay Private Mortgage Insurance (PMI).
  • 10% down ($40,000): Requires an annual gross income of around $110,000 to $122,000.
  • 20% down ($80,000): Requires an annual gross income of about $87,000 to $112,000 because you avoid PMI and lower your monthly principal.

For a deeper breakdown of how different down payments and local costs shift these numbers, you can check out guides from CNBC Select or SmartAsset.

Dave Ramsey's 7 Tips For First-Time Home Buyers

9 related questions found

Why is it not smart to buy a house right now?

Buying a house right now is considered unwise by many experts due to a combination of high home prices, elevated mortgage rates, and the "lock-in effect" keeping inventory tight.

Key Reasons to Wait

  • High Mortgage Rates: Rates remain elevated near historical averages from recent years, making monthly payments significantly more expensive than they were a few years ago.
  • The Lock-In Effect: Roughly 70% of current homeowners have mortgage rates below 5%, giving them no financial incentive to sell and causing tight housing inventory.
  • Stretched Affordability: Near-record home prices combined with high interest rates mean a much larger percentage of monthly income goes strictly toward housing and property taxes.
  • High Ownership Costs: Beyond the mortgage, costs for homeowners insurance, property taxes, and home maintenance have surged.
  • Renting Flexibility: In many parts of the country, high borrowing costs make renting mathematically cheaper in the short term than taking on a heavy mortgage.

You can check broader economic trends and market forecasts through Redfin or data analysis from Yahoo Finance.

Can I afford a $300 k house on a $70 k salary?

Yes, you can afford a $300,000 house on a $70,000 salary if you have a solid down payment and little to no other debt, though it will stretch your monthly budget.

The Financial Breakdown

  • Gross Income: A $70,000 yearly salary gives you about $5,833 per month before taxes.
  • Housing Budget Rule: Financial experts recommend spending no more than 28% to 30% of your gross monthly income on housing. This equals about $1,633 to $1,750 a month.
  • Monthly Payment on $300k: With current interest rates around 7% and a standard down payment (like 10%), your monthly payment for principal, interest, taxes, and insurance will likely land between $2,000 and $2,400, pushing you closer to 35% or more of your gross income.

Key Factors That Make It Possible

  • Down Payment: Putting down 10% to 20% lowers your monthly loan amount and helps you avoid high private mortgage insurance (PMI) costs. A tiny down payment (like 3%) on a $300k home makes a $70k salary very tight.
  • Other Debts: If you pay hundreds each month for a car loan, student loans, or credit cards, lenders may deny a $300k loan or you may feel overwhelmed by the bills.
  • Location: Property taxes and insurance vary by state and city, which can shift your monthly payment up or down by hundreds of dollars.

You can use a Zillow Affordability Calculator to test different down payment amounts. You can also review guidance from SoFi on Mortgage Income Requirements to see more details.

Does Dave Ramsey recommend selling your house to pay off debt?

Dave Ramsey recommends selling your house to pay off debt only as a last resort.

When Selling the House Makes Sense

According to the Ramsey Solutions Real Estate Guide, selling your home is an expensive and emotional process. He advises doing it in only two specific situations:

  • The mortgage is too expensive: Your monthly payment takes up way too much of your income (generally more than 25% of your take-home pay), making it impossible to make progress on other debts.
  • You were already planning to move: You intended to relocate anyway, and selling will improve your overall financial picture.

What to Try First

Before considering selling your home, Ramsey expects you to exhaust other intense debt-slashing methods for 6 to 12 months. You should try:

  • Cutting expenses to the absolute minimum.
  • Increasing your income with side jobs or overtime.
  • Selling other items you do not need (such as vehicles).
  • Following a strict written budget (an "every dollar" budget).

If you like your home and the mortgage payment fits your budget, he says to keep the house and attack the other non-mortgage debts through budgeting and extra work.

Can I afford a $300k house on a $50k salary?

No, you generally cannot afford a $300,000 house on a $50,000 salary under standard financial guidelines.

The Math Behind the Numbers

  • Gross Monthly Income: A $50,000 yearly salary is about $4,167 per month before taxes.
  • The 28% Rule: Financial experts recommend spending no more than 28% of your gross monthly income on housing. That equals a maximum housing payment of roughly $1,167 per month.
  • The $300k Payment: A $300,000 home with a typical interest rate and a standard down payment results in a monthly payment (principal, interest, taxes, and insurance) of around $1,800 to $1,900 or more—well above your safe budget limit.
  • Income Rule of Thumb: Most traditional guidelines state you can safely buy a home priced at 2.5 to 3 times your annual income, suggesting a target home price between $125,000 and $150,000 (or up to $185,000 with very tight budgeting).

When It Might Be Possible

  • Large Down Payment: If you have a massive cash down payment (such as $100,000 to $150,000 from savings or the sale of another property), your actual loan amount shrinks, lowering your monthly payment.
  • Zero Other Debt: Having no car payments, student loans, or credit card debt makes it slightly easier to qualify, though it will still stretch your monthly budget very thin.
  • Co-Borrower: Adding a second income or co-signer to the mortgage changes the math completely.

You can run your exact numbers using a tool like the Zillow Mortgage Calculator or read more budget advice on The Mortgage Reports.

Which mortgage company does Dave Ramsey recommend?

Dave Ramsey exclusively recommends Churchill Mortgage as his trusted mortgage provider.

Why Dave Ramsey Recommends Churchill Mortgage

  • No-Score Loans: They specialize in manual underwriting for buyers who are debt-free and do not have a traditional FICO credit score.
  • Aligned Philosophy: They support Ramsey’s goal of fast, debt-free homeownership rather than 30-year debt.
  • Long-Term Partnership: The two companies have partnered for over 30 years.

Core Mortgage Rules Associated with the Recommendation

  • 15-Year Fixed-Rate: Ramsey insists on a 15-year fixed mortgage instead of a 30-year loan.
  • 25% Rule: Monthly housing payments should not exceed 25% of your take-home pay.
  • Down Payment: He recommends putting down at least 10% to 20%.

Note: Opinions on Reddit are mixed; while users appreciate Churchill for manual underwriting without a credit score, some report that their rates can be higher than competitors.