'You were wrong!': Dave Ramsey takes a victory lap on his real estate prediction from 2 years ago and makes another prediction about what's next for housing
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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.”
However, this problem isn’t just affecting prospective homebuyers. Renters are also experiencing the strain of rising prices. According to Zumper, the monthly rent for a one-bedroom apartment nationwide rose to $1,487, marking a 0.3% increase from February. Similarly, the cost of a typical two-bedroom apartment saw a 0.5% jump to $1,847.
If you’re looking for a way to cash in on the increased rental market prices, check out Arrived. Backed by elite investors like Jeff Bezos, this real estate investing platform lets you buy fractional shares of rental and vacation properties, sparing you the burdens of property management.
You can explore a handpicked selection of properties, each vetted for their potential for appreciation and income generation. Then, you can choose the number of shares in the property you want to invest in starting with as little as $100.
Read more: Jeff Bezos and Oprah Winfrey invest in this asset to keep their wealth safe — you may want to do the same in 2024
Housing forecast
Factors that led to the current crisis are set to continue, at least for the foreseeable future. Analysis by Realtor.com revealed that the gap between the number of households formed and the number of single-family housing units constructed was 7.2 million in 2023.
“Prices will go up,” Ramsey predicted. “This is what’s happening with real estate. I promise you, you can look up this episode five years from now and you’re going to go, ‘god, that old fart was right again.’”
If you’re keen to follow Ramsey’s prediction, consider investing with Fundrise, which lets everyday investors access private real estate funds with investments starting at $10.
Fundrise’s expansive $7 billion+ real estate portfolio is carefully designed to maximize longterm growth and effective diversification.
Their diverse collection of funds hold large positions in single-family rental homes in highly desirable locations experiencing supply constraints, so investors can take advantage of increased demand.
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