Dave Ramsey now makes 3 clear predictions about real estate and shopping

Many people looking to buy a home may try to get the latest and most reliable expert advice on the state of the real estate market before signing on the dotted line.

But personal finance author and radio host Dave Ramsey explains that real estate professionals do their best to use available data to make guesses about future trends, but no prediction is 100 percent guaranteed.

Related: Dave Ramsey Gets Straight on Interest Rates and Mortgages

Ramsey also points out one major factor that needs to be in place regardless of the state of the housing market: The potential home buyer needs to have their own personal finances in good enough shape to make the move. After all, buying a home is generally considered to be the largest investment the average American makes.

So, naturally, the biggest determinant of one’s ability to buy a home is financial preparedness. Ramsey advises, in most situations, not to put too much emphasis on housing market conditions.

That said, Ramsey offers three predictions for the housing market for at least the rest of the calendar year.

• The interest rate will decrease.
• A housing market crash is not imminent.
• Housing inventory is likely to remain low through December.

And he goes on to explain what these predictions mean, assuming they hold true, for potential homebuyers.

Dave Ramsey explains mortgages and the interest rate outlook

Mortgage rates rose at a very rapid pace between 2021 and 2023, primarily because the Federal Reserve raised the federal funds rate repeatedly during that period in its effort to combat inflation.

In August 2024, the average 30-year mortgage saw a major drop to 6.47%. And the mortgage rate is likely to fall further in the next few months as the Fed meets on September 17th and 18th with a high expectation that it will lower the federal funds rate.

“For the housing market overall, this means that buyer demand should increase through the rest of 2024 as more people can afford a mortgage,” Ramsey Solutions wrote.

More about Dave Ramsey

• Ramsey explains a major key to early retirement
• Dave Ramsey discusses a big money mistake to avoid
• Ramsey offers important mortgage advice

Ramsey then goes into some detail about what it means to be financially prepared enough to make the purchase.

A man is seen standing in front of a house in a row of them. Personal finance coach Dave Ramsey advises people to have some financial priorities before buying a home.

David McNew/Getty Images

Ramsey clarifies what it means to be financially prepared to buy a home

Because Ramsey said potential home buyers shouldn’t pay too much attention to the housing market as a major factor in their decisions about when to buy, the personal finance personality took some time to explain the factors people should pay attention to them.

Related: Dave Ramsey Has a Major Warning About Retirement, 401(k), Social Security

So Ramsey offered a list of requirements potential homebuyers should check before making the big purchase.

• To be debt free.
• Have an emergency fund in lieu of three to six months worth of expenses.
• Have a mortgage payment that does not exceed 25% of your monthly income.
• Having a down payment of 20% or more of the cost of the house.
• You can pay closing costs without taking them out of your down payment.

“If you don’t meet these qualifications, it doesn’t matter if the market is in your favor,” Ramsey Solutions wrote. “Buying a house would be a curse instead of a blessing.”

Related: Veteran fund manager sees world of pain coming for stocks