Home Finance Finance experts’ crucial advice for Americans who want to buy homes and...

Finance experts’ crucial advice for Americans who want to buy homes and ‘bloody Sunday’

As decades-high mortgage rates shake up the real estate landscape, financial experts on the Ramsey Solutions team have provided advice for homeowners to navigate the volatile market.

“If you’re out of debt and you’ve got your emergency fund, prices aren’t going to go anywhere but up, even with interest rates going up,” Ramsey Solutions founder Dave Ramsey said on a “Fox & Friends” panel Friday. “So if you get an interest rate you don’t like, you obviously can refinance later and get back out of it. But the housing market is just stalled.”

“And man, we got Bloody Sunday with the student loans kicking back in Sunday, and Christmas is bearing down on us,” he continued, “and so it is time to get on a budget and get on a plan.”

The average rate on the benchmark 30-year home loan reached its highest level since the year 2000, increasing from 7.19% last week to 7.31% this week, according to the latest data by Freddie Mac.   

What’s more, the average rate for 15-year fixed rate mortgages rose to 6.72% from 6.54% last week. 

“If you’re out of debt and you’ve got your emergency fund, prices aren’t going to go anywhere but up, even with interest rates going up,” said Ramsey Solutions founder Dave Ramsey.
Anna Webber

“If you’re a millennial, you’re Gen Z, you’re hopeless right now. You’re feeling cynical,” “The Ramsey Show” co-host George Kamel also said Friday. “So I want to give them some hope that it’s possible for them, but you got to put away the FOMO because your parents are saying, ‘You’re throwing away money on rent, get a house, get a house, get a house,’ and you’re broke.”

“And so we’ve got to have some patience because rent and mortgages are not apples to apples,” Kamel added. “You’ve got taxes, you’ve got insurance, HOA, PMI, the letters go on. So before you’re going to buy a house, make sure your debt free with an emergency fund. We want you to be a homeowner, we don’t want that home to own you.”

The median home sales price was $374,975 for the four weeks ending Sep. 17, up 3.4% year-over-year, according to Redfin.

The average rate on the benchmark 30-year home loan reached its highest level since the year 2000, increasing from 7.19% last week to 7.31% this week.
Getty Images

This pushed median monthly house payments to an all-time high of $2,661.

The Ramsey team reinforced the idea of sticking to a personal budget as Americans enter the thick of holiday season.

“You want to be able to say: okay, I’m going to plan ahead of time, I’m not going to let this sneak up on me,” Rachel Cruze, Ramsey financial expert, said. “So doing a budget, again, is huge when it comes to this… So be diligent and also be honest with your friends and family. Like if inflation has hit you and you’re tired this month, right, or next month at the end of the year, be honest about that and just say: hey, Christmas may look different.”

When it comes to holiday spending, “America’s Career Coach” Ken Coleman claimed the average U.S. family spends anywhere from $800 to $1,500 per season.

“So how about making some more money? You got time, and time means money. So you look at your current skills and experience in your work. How can you turn that into freelancing income?” Coleman suggested.

“This is the hottest side hustle in America right now is freelancing,” he continued, “but there are real things like customer service at night, there are online tutoring jobs, those just to name a few, to where you can make that extra $800 to $1,500 between now and Christmas to pay cash for Christmas.”

The experts emphasize the importance of patience because buying a house requires more finances than most people think.
Getty Images

While budgeting may feel like a punishment, Ramsey personality Jade Warshaw reminded viewers that “it gives your permission to spend.”

“It helps you look at your money and see, okay, this is what I get to do with my money, I get to enjoy the holidays,” Warshaw said. “But I want to add, when it comes to the holidays, I like to give people permission to do the least. Everyone’s doing the most and I’m like, go small. You don’t have to have 50 parties and 50 gifts. Do it small or don’t do it at all.”

Today, there exists an “anxious generation” when it comes to budgeting and homeownership, Ramsey’s mental health expert John Delony cautioned.

“If you look at mortgage rates, you look at student loans coming on, we look at credit card debt, we are anxious, anxious, anxious,” Delony said. “A great gift we could give to our kids is not more stuff.”