Dave Ramsey Says the Housing Market Is Not Crazy Anymore. Should You Plan to Buy This Year?

Are things finally getting better for buyers?

There's a reason home prices have been sky-high this year. The real estate market has lacked inventory in a serious way. And that's forced buyers into bidding wars, which are known to drive home prices upward.

Right now, there's still a shortage of available homes. But housing inventory has, thankfully, picked up since the start of the year -- so much so that buying a home may finally be a more viable option.

We're not in 'crazy' territory anymore

In a recent blog post, financial guru Dave Ramsay wrote, "The crazy time of houses selling in a few hours after getting 20 offers for thousands of dollars over asking price is finished." And that's good news for buyers.

Now to be clear, Ramsey insists that the housing market is still strong, and he's right. Rather, the market just isn't, as he puts it, crazy anymore.

In May, home sellers received about four offers from buyers on average. That's lower than the number of offers the typical seller got earlier on in the year. However, it's still about twice the number of offers sellers received on their homes before the pandemic began.

Should you plan to buy a home during the latter part of 2022?

The fact that inventory is up is a good thing for home buyers, because less competition could mean not having to overpay for a home to an uncomfortable degree. But let's also remember that there's still a shortage of available homes for sale, and that prices are still very high. That, combined with higher mortgage rates, could still make it difficult for some buyers to purchase a home in the near term.

If you're not sure whether you should move forward with your home buying plans, crunch the numbers. As a general rule, your housing costs, including your mortgage payment, property taxes, homeowners insurance, and any other predictable monthly expense, should not exceed 30% of your take-home income.

If you're able to stick to that limit based on today's home prices and mortgage rates, then buying in the next few months could make sense. But if you're looking at housing costs that will exceed that 30% limit, then you may still want to wait.

In time, as housing inventory picks up even more, we could see less competition and lower home prices. Mortgage rates could even come down, too. So if you can't swing a home in the near term, don't despair.

The housing market may no longer be crazy, as Ramsey puts it. But that doesn't mean buyers have the upper hand. We're nowhere close to that scenario, so don't get discouraged if a home purchase isn't quite yet within reach.

In fact, if you're not yet ready to buy, you can take the opportunity to shore up your finances to make a home purchase easier to manage in the coming years. That could mean boosting your down payment funds and also, your emergency savings so you have money on hand for home repairs and other surprise expenses that pop up once you buy a place of your own.