Brought to you by the EveryDollar app, start budgeting for free today. Well, as predicted by the Ramsey team and me and George, the real estate market is beginning to thaw as the snow thaws. And I mean, we told you in November after the election that probably what would happen would not be instantaneous and that gradually the market would begin to heal as springtime came around. So we are seeing in the real estate market an uptick in activity.
We are seeing interest rates down very slightly, just a little bit. And no big dramatic anything in the real estate world. There's no sudden supply, there's still a shortage. There's no huge drop in interest rates instantaneous, which didn't expect to have happened.
I didn't anyway. And so the real estate market is starting to move again. And so the thing we've told you for 30 years is still true that when it comes to buying a house home for your family, real estate's a great investment when bought properly and at the right time in your plan and what happens at your house, in other words, what happens in your house is more important than what happens in the White House. And so Donald Trump's not going to buy you a house, Joe Biden didn't buy you a house.
It's not their job, either one of them. And it's your job to buy a house after you get out of debt, have an emergency fund. And when you can afford the payment on the fourth of your take home pay on a 15 year fixed rate. And that's very doable once you get your crap together.
But there's people worried about tariffs driving construction cost up. There's people thinking that the government's going to get in the housing business and drive supply up, which will bring prices down, not going to happen. Tariffs aren't going to drive construction costs up, not appreciably, even if there are tariffs and there aren't any yet. Hello.
Basically, the White House has a lot less effect on the housing market than you think they do. Well, no, but the effect they do have is, and they are starting to have that effect, is to make people believe again so the economy starts moving. And when people are hopeful, they purchase things. They invest.
They get off the side and they are hopeful. And if you believe, whether you're Democrat or Republican, if you believe the economy's going to get better, you will make moves that make the economy better. It's a self-fulfilling prophecy. And housing is one of the elements of that.
And I do think that's going to happen. And I'm not going to give President Trump the credit for having grown the economy. I'm going to say the American public grew the economy. But it is if he gave them hope and caused them to do that with cutting, spending, which they're obviously doing pretty rapidly and pretty wildly.
It's kind of fun to watch. For a guy who likes to cut spending, I mean, I'm in Hall Kevin, right? So that's a good thing. And I know it's your grandmother's program or whatever they cut and some of your piss, but I really don't care.
Cut spending. And you've been spending more than you make like some kind of drunken congressmen. So that's wonderful. And if that kind of thing gives people hope, and if he puts pressure on the Fed and causes interest, he goes down, that gives you hope and causes you to go into the marketplace, the real estate market is going to take off.
So I am predicting a healthy, good, functioning real estate market again by fall. I don't think it's going to be a boomer-bus thing like it was after COVID. It was crazy. But I think it's going to get moving again, and it's been very stagnant.
What do you think? Yeah, it's definitely been crawling, and I think it's going to take longer than we all want it to. And so for those folks who've been sitting on the sidelines, waiting for something drastic to happen, quit waiting. If you're ready to buy a house like you said, don't time the market, time your own financial life so now's the right time for us to buy.
This is the time to buy. I'm looking at several pieces of real estate right now, and I'm not doing that because Trump's in office, I was doing it before he was in office, and I will keep looking, but I'm only going to do the deal when the deal is right, and it fits in our parameters and how we do real estate. And you're paying cash, and for those folks that are taken on the mortgage, they've been going, well Dave, the rates are so high, what do you say to them about the rates? You marry the house and you date the rate.
So when it does dip down. You just refinance, you know, it's not that hard. Just don't buy too much house and don't be crazy, but if interest rates go back down to three, and I don't know if they will or not, I never thought they'd be there to start with. So what do I know?
But anyway, if they do go down, it's not that big a problem, just refinance, and you'll have a little bit of cost and within 18, 24 months, you'll get your money back and you'll be rocking along and making the better rate then after that. So don't let that keep you out of the market. If you're waiting on rates to come down, that's dumb. Cause as soon as they go down, you're going to see some stimulation in house prices, they're going to offset them going up.
So, you know, go ahead and get in that discipline when you're time, but you need to be out of debt, you need to have an emergency fund in place with three to six months of expenses, debt free, and you, you know, with a good, strong down payment, we'd like to see if you're not a first-time home buyer, it should be at least 20% down, because you can avoid PMI, which is private mortgage insurance, which is about $75 a month per hundred thousand borrowed. And it's up. So, I mean, if you borrow like 400,000 bucks, that's 300 bucks a month, that you're paying for insurance for the mortgage company to insure them in case they foreclose on you. That's what PMI is.
So risky buyer fee. It's a risky buyer fee, because you didn't put down 20%, that's good, but that's good line, George. Thank you, I worked hard on that. I mean, I've been doing this 30 years, I never came up with it.
That's pretty good. And so that, but if you don't put down 20%, and you still buy, we're okay, we're not mad at you. We're just saying you can save a lot of money if you did put down. So good down payment, where your house payment on a 15 year fixed is no more than a fourth of your take-home pay.
And your take-home pay is not after insurance in 401k. Your take-home pay's after taxes. What are you taking home after taxes? That's the number we're talking about.
So I'm gonna talk about your check. I'm talking about what your, that's called take-home pay. It's not your, your check is different than take-home pay. So- You got health insurance premiums in the 401k.
That's not in the mix, okay? So, but anyway, yeah, because you need to be able to cash flow this thing and get it paid off and move along to the next step of wealth building. But real estate is good. It's not horrible right now.
It's not booming, but it's definitely not horrible. It is way better than it was four months ago. Way better. I mean, I've got a couple properties on the market that zero people were looking at.
And now people are in there every week and every day looking at them. And so, I mean, we're actually seeing activity happen, you know, on those properties and they're not rentals. I mean, those are sales. So it's happening, real estate is moving again.
It's very, very quiet about, because it's also the stuff in the news. And nobody's talking about real estate much. But we are here because you talk about it at home and you're thinking about, should I buy a house? What happened in the world?
No, he's not going to be in the world. No, he's not going to make your life better by sending you money. It's not going to happen. And I told you that was going to happen.
I told you that about Biden. So you guys got to be grownups and go for your own destiny. Yeah. Wait, wait around, regardless of what's happening in economy, you can affect it a lot more than anyone else.
So we've got a lot of resources too, Dave. Our team built a real estate hub with tons of resources, tools, calculators, articles, even a video course, ramsysolutions.com slash real estate.