After 46 years in the real estate industry, Dave Ramsey is confident about his real estate analysis. In an episode of “The Ramsey Show,” he took a victory lap on a prediction he made about America’s housing market in July 2022: there was “zero chance” of a housing crash.
Relatively steady home prices, despite higher interest rates, seem to have vindicated Ramsey’s bet.
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“You were wrong!” he said of his critics, adding, “I freaking know what I’m talking about.”
Here’s why Ramsey wasn’t convinced by the gloomy outlook on housing.
Supply crunch
When the Federal Reserve started raising interest rates in 2022, many were concerned that higher borrowing costs would reduce home sales and prices.
However, Ramsey claims he was skeptical of these concerns and was instead expecting home prices to remain steady or rise modestly. His thesis was based on simple supply-demand dynamics.
“When there is a shortage of an item … prices go up,” he said. “That’s basic economics.”
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This theory seems to be vindicated by a report from the National Association of Realtors. Home prices climbed 5.7% over the past year as of February, with the median American home being worth $384,500.
A combination of rising prices and rising mortgage rates has made home affordability deteriorate. In 2023, only 15.5% of the homes…
