Dave Ramsey bluntly speaks to homebuyers in tough housing market | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

It is often said that buying a house is the largest financial investment most people ever make.

It is no surprise, then, that potential homebuyers are cautious about ensuring they are comfortable with all the competing priorities and details they encounter before making a real estate purchase.

Regardless of whatever conditions the housing market may be experiencing at any given time, personal finance bestselling author and radio host Dave Ramsey suggests important factors homebuyers ought to consider before making the move.

“No one can predict real estate trends with 100% accuracy,” Ramsey wrote. “Only your financial situation can truly determine the right time for you. No matter what the market is doing, buying a house is a bad idea when you’re in debt, don’t have an emergency fund, or haven’t saved up a strong down payment.”

Dave Ramsey bluntly explains financial conditions for homebuying

Americans aiming to purchase a home benefit from entering the process debt-free and with a fully funded emergency reserve, Ramsey explains.

Obligations such as student loans, credit card balances, and auto payments reduce the financial margin needed to save for a down payment.

Once a household owns a property, unexpected repairs and costs are inevitable, making it critical to maintain an emergency fund equal to 3 to 6 months of typical living expenses.

Ramsey clarifies his general rule that, for sustainable homeownership, monthly housing costs should not exceed 25% of take-home pay. This calculation includes the mortgage principal and interest, property taxes, homeowners insurance, private mortgage insurance (PMI), and any homeowners association (HOA) fees.

Having enough money saved to make a strong down payment is vital before purchasing a home, Ramsey emphasizes.

“Taking out a mortgage with a super low or no down payment will have you paying extra in interest and fees and keep you in debt for decades,” Ramsey wrote. “That’s why you should save up a down payment of at least 5–10% if you’re a first-time home buyer, or 20% if this isn’t your first rodeo.”

“Putting down 20% or more also helps you dodge PMI — an extra monthly fee that protects the lender, not you, if you can’t make your payments,” Ramsey added.

Government programs exist to help potential homebuyers with loans and mortgage assistance, usa.gov explains.

Current housing market conditions are challenging

A recent National Association of Realtors (NAR) report explained the following crucial housing market findings:

Between mid-2024 and mid-2025, the housing market faced a sustained shortage of available properties.
Homes that did come on the market were often priced beyond the budgets of many potential buyers.
Mortgage rates averaged 6.69% during this period, reducing overall affordability.
Higher borrowing costs led many first-time buyers to exit the market.
Existing homeowners saw continued gains in home equity despite affordability challenges.
The market showed sharp divisions, with cash purchases reaching record levels.
Participation from first-time buyers fell to a historic low of 21%.
The typical age of first-time buyers rose to an all-time high of 40 years.
The share of first-time buyers has declined by 50% since 2007, just before the Great Recession.
Lower participation among first-time buyers has long-term implications for wealth building and mobility.

Dave Ramsey stresses importance of homeownership planning

Homebuyers need to be prepared for the ongoing costs of ownership, Ramsey explains. Depending on the age and condition of the property, several maintenance projects may arise each year, often ranging from a few hundred to several thousand dollars.

Larger living spaces typically bring higher utility bills — expenses that must be factored into a household budget.

“When you move from renting to owning a house, there’s no more landlord to fix things for you,” Ramsey wrote.

It also makes sense to consider how long one plans to remain in the home, Ramsey advises.

The upfront costs and effort involved in purchasing are unlikely to pay off if the property is only occupied for a short period. However, for those who are committed to their city and expect to stay at least three years, homeownership can be a sound long-term investment.

“If each of those statements sounds like you — congrats!” Ramsey wrote. “Now could be the best time for you to buy a house.”

Potential homebuyers delay major life decisions

The Coldwell Banker 2025 American Dream Report revealed the following information regarding aspiring homeowners.

18% of Americans are delaying marriage until they can afford to buy a home.
18% are postponing having children until homeownership is attainable.
17% are putting off changing jobs or careers until they can purchase a home.
16% are forgoing living independently due to the cost of buying a home.
15% are postponing starting a business or becoming self-employed until they can afford a home.
84% of Gen Z aspiring homeowners (ages 18–28) are delaying at least one major life decision until they can buy a home.
29% of Gen Z aspiring homeowners are specifically delaying having children until they achieve homeownership.
53% of aspiring first-time homeowners do not expect to purchase their first home until age 40 or older.
56% of Americans say homeownership represents the American Dream more than marriage, children, retirement, career success, or a college degree.
83% of non-homeowners want to buy a home someday, including 97% of Gen Z and 93% of Millennials (ages 29–44).
65% of Americans view homeownership as a smarter long-term financial decision than renting in today’s market.
48% of Americans consider investing in real estate a better wealth-building strategy than investing in the stock market.