Dave Ramsey was vocal about his prediction two years ago that home values would rise, a controversial thesis in the middle of the Federal Reserve's interest rate hiking campaign.
His reasoning was simple, highlighting the supply shortage in the market by saying that "when there is a shortage of an item … prices go up."
Now, with around 16% of listed homes affordable to local median-income earners, according to Redfin data, Ramsey warns against waiting for prices to drop.
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In a recent episode of "The Ramsey Show," Ramsey said, "Prices will go up … I promise you, you can look up this five years from now and you're going to go ‘God, that old fart was right again.'"
According to Bank of America Corp.'s 2023 Homebuyer Insights Report, 56% of Gen Z and millennials who hope to own a home plan to buy one within the next two years, highlighting strong demographic demand.
Count Blackstone Inc. BX among the institutional investors looking to pounce on the trend. Blackstone recently announced the acquisition of AIR Communities for around $10 billion, making it the firm's largest-ever buy in the multifamily market.
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According to Reuters, Blackstone's bet is, in part, because of its belief that a slowdown in construction will keep a cap on the supply of apartments in America.
It continues the trend of Wall Street gobbling up rental units. Last year, MetLife Investment Management predicted that institutional investors may control 40% of American single-family rental homes by 2030.
For prospective homebuyers worried about high interest rates and hoping they'll fall before buying, Ramsey has more advice: "Marry the house, date the rate."
By buying, homeowners can build equity over time, benefiting from possible price appreciation instead of making continual rent payments to landlords like Blackstone.
However, there is some good news for renters in this market. Realtor.com recently reported that it's now cheaper to rent than buy a home in all of America's 50 biggest metro areas.
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