Dave Ramsey Says You Should Buy a House ‘Right Now.’ Here Are 3 Reasons Why He May Wrong

It could pay to hold off on homeownership a bit longer.

There's a reason so many would-be home buyers have pulled out of the market this year. Home prices have been sky-high since the latter part of 2020. Throw in the highest mortgage rates we've seen in decades, and it's no wonder so many buyers are throwing their hands up -- and resigning themselves to keep renting until the housing market cools off and borrowing rates drop.

But if you ask financial guru Dave Ramsey, he'll tell you that you ought to go buy a home right now if you can afford one, despite today's higher interest rates and housing prices. His logic is that you can always refinance your mortgage down the line, once rates drop to more affordable levels.

That logic isn't totally wrong. Mortgage rates tend to fluctuate over time, and there's a good chance they'll be lower at some point. But here's why you may not want to take Ramsey's advice -- and stay out of the housing market.

1. You may not be able to afford your mortgage payments

Higher mortgage rates aren't just annoying -- they could make it so your home just isn't affordable. And taking on housing payments that are too high could cause you to fall behind on your mortgage or other bills -- and risk long-term damage to your credit score.

2. Refinancing isn't a guaranteed option

While you might have the option to refinance your mortgage years after signing it, you could end up waiting a really long time for rates to fall to more affordable levels. And even then, your personal financial circumstances might make it so that refinancing isn't feasible.

Let's say mortgage rates fall at the same time your credit score has taken a major hit because you lost your job for a period of time and had to borrow money to get by. That could leave you in a position where you can't qualify for a refinance -- or at least one at an appealing rate.

3. You might have to compromise on the home you want

A big reason home prices are up so much right now is that the real estate market still doesn't have enough inventory to meet buyer demand. And so if you buy a home now, you're not just looking at spending more for it. You might also end up with a home that doesn't really suit your needs.

Let's say you want a three-bedroom detached starter home. If you can't find one for sale, you may have to settle for a three-bedroom townhouse instead. But living in a townhouse is a very different experience than living in a detached house, and it may not be worth compromising on such a big factor.

Dave Ramsey's logic about buying a home despite sky-high mortgage rates does make sense -- to a degree. But that doesn't mean everyone should rush out to purchase a home. Think about the costs you're looking at if you buy today and the features in a home you might have to give up. You may decide that the time just isn't right to make an offer, and there's nothing wrong with that.