[Music] do you ever feel like we've totally lost control of the housing market and you start to wonder gosh was I just unprepared for adulthood or has real estate genuinely gotten so messy over the last decade well we are going to talk about it and we're going to do a deep dive on the housing market but before we get started make sure to subscribe to this Channel and share this episode with a friend all right let's go down memory lane shall we just picture this it's 2012 and you're wearing a pair of Hunter rain boots and a J crew statement necklace and life is good in 2012 the median house price was around $175,000 and the average interest rate for that same year was about 3.6% now as of early 2025 the median house price is around $412,000 with about a 6.8% interest rate and in the last decade there are really six main factors that affected the housing market so we're going to dive in so the first factor is that the FED kept rates low in the 2010s to offset the 2008 crash so after the big mortgage crash of 2008 2009 they really you know said okay we need some home buyers in here that are actually can be approved for loans and we want to get people back in So rates were in the 2% 3% 4% for a really really long time which was fantastic i' say a really long time in my in my pers in my perspective it was a long time for others it felt short but the idea that I mean for years you guys for almost a decade rates were like at a great spot and very very affordable but now with inflation other factors that we're going to talk about the rates have gone up up up number two buyers are at risk for becoming house poor so by 2012 the housing market began to really recover after the 08 crash and Banks again kind of started easing up not as much as they did before 08 but a little bit on who gets approved for a mortgage so it is harder to get a mortgage than it was back before the' 08 crash but again there's a level of like this easing up and what can happen is when you have a budget to buy a house and you're like okay this feels reasonable and especially if you go by the ramsy plan your payment should be no more than 25% of your take-home pay on a 15-year fixed rate putting at least 5% down on a house so like it's a pretty conservative formula that we use and what happens is you're like okay this feels good this feels manageable and then you go to the bank and they're like oh you're approved for so much more than that and what ends up happening is people over buy what they need and then they end up saying oh my gosh I have so much of my income going to my mortgage and not you know going to other things and so we do see people being hous for more and more and especially since the spike of Prices rose so quickly over the last few years people kind of got into that emotional mindset and they bought bot bot pretty high up and then now they're feeling the pain number three the housing Supply shortage so everyone thought there was going to be a bubble when all these prices really started going up the last two to three years and they're like oh my gosh these you know these prices are completely out of control and there's going to be a bubble it's going to pop but we kept saying on the Ramsey show and here like there's not a bubble yes prices are insane and they keep going up very very quickly but there's not a bubble because there's more buyers in the market than there are actual houses and so that supply and demand is what always keeps you in check and so again if there's more houses on the market than buyers that's not good but there are still more people buying houses than actual houses out there number four is the rise of remote work so the whole change after covid of working from home a lot of corporate employees started looking for more spacious living they wanted an extra home for a home office they didn't need to be as close to a metro area so they wanted to move out more to the suburbs um everything kind of changes in that way and that means there was a big increase in competition especially for young families in more metr Suburban areas and so we did see that Rise um and that's a lot of the housing pricing rise is that again people were looking for more space another factor that has become more prevalent over the last few years is the need for aordable Quality Health Care which is why I love and want to recommend Christian Healthcare Ministries when you go against what Society thinks is quote normal it might seem weird at first but that is okay we want you to be weird if that means you're doing things intentionally including how you spend your Healthcare dollars and one way to be intentional is with Christian Healthcare Ministries chm isn't health insurance they're a health cost sharing ministry that's helped hundreds of thousands of families like yours take care of healthc care costs without sacrificing their freedom Program start as low as $98 a month so find out more and join at chministries.org budgets that's CH ministries.org budget number five the rise of institutional investors so hedge fund companies private Equity firms uh I mean there's a lot of people out there that are going in and snatching up a big bulk of houses and we're seeing this more and more and they're putting them up for rent versus selling them to buyers which creates that life cycle again of a of owning a home and even the rise of Airbnb and vbo I mean a lot of people are going into this so we are seeing companies go in and buying a ton of houses I don't think it's like a big factor in this but is definitely to consider number six is the cost of living increase so inflation it it is around we have felt it really since covid and it was a little bit delayed after all the covid stuff happened but because of supply and demand because of supply chain everything that was happening we really felt the brunt of this right 12 18 months after Co really hit because it was like yeah everything froze in the economy and so because of that things were not being produced we were not seeing things happen and even for housing you know Builders couldn't get subs they couldn't work um every material was so so pricey and because of that they had to raise the cost of homes anyway so again that had a lot to do with what we're feeling in the real estate market today now on the top of this list of factors obviously the real estate market also fluctuates depending on where you live what cost of living looks like for you locally all of it but for a general State of the Union kind of a temperature check when it comes to the real estate market one of my favorite resources is Ramsay's real estate homebased market trends page so because of this it gives you this kind of bird's eye view of the market conditions because again real estate it's one of these things that just feels like oh my gosh everything's so high it's so crazy I don't know I don't know I don't know so they update this dashboard consistently again for you to kind of get a pulse of what's really going on out there Ramsey has countless real estate tools that you can access in the market trends home base and so again check out that website I'll put link down below to get more information on it make sure to check that out when it comes to real estate all right you guys remember to take control of your money and create a life you love
