Today, Explained Buy a house? In this economy?
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Mar 28, 2024 
Nicole Friedman, a housing reporter at The Wall Street Journal, shares insights on the dismal home affordability crisis and the economic forces behind it. Dave Ramsey, CEO of Ramsey Solutions, weighs in with his take on the current market, emphasizing the longstanding nature of these challenges. The discussion covers the struggles of younger generations, escalating mortgage rates, and the trend of multi-generational living as a financial strategy. They also touch on the generational divide in financial advice regarding homeownership in today’s economy.
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Impact of Rising Mortgage Rates
- Rising mortgage rates significantly impact affordability, creating a standoff between buyers and sellers.
- Higher rates translate to substantial monthly payment increases, potentially pricing out many buyers.
Stagnant Home Prices
- Home prices haven't dropped significantly despite lower demand because supply is also down.
- Many homeowners with low mortgage rates are reluctant to sell and buy at higher rates and prices.
Housing Shortage
- Housing supply hasn't caught up with demand after the 2008 financial crisis crippled homebuilding.
- Builders became cautious after the crisis, leading to a decade-long housing shortage.