Is Dave Ramsey's Home Buying Advice Realistic For The Average Homeowner?
Dave Ramsey is known for his no-nonsense approach to personal finance, including bold guidelines about how — and when — to buy a home. His long-stand…
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Is Dave Ramsey's 15-Year Mortgage Rule Outdated in 2025?
Dave Ramsey's 15-Year Mortgage Rule: Still Relevant in 2025? In a recent viral video, financial advice given by Dave Ramsey has been challenged. The video argues that Ramsey's recommendation to only take out a 15-year mortgage is unrealistic for the average American in 2025, citing the significant increase in housing costs. The video's analysis shows that to meet Ramsey's criteria of a mortgage payment not exceeding one-fourth of your take-home pay, an individual would need an extremely high income. The video uses the example of the average home price in the United States, which is significantly higher than in previous years. It then calculates the monthly mortgage payment for this average home, assuming a 15-year loan and perfect credit. This calculation shows a substantial monthly payment, requiring a very high annual salary to meet Ramsey's guideline. The video further illustrates the point by comparing the required income to the median household income in the US, highlighting the significant gap. "Even with perfect credit and disregarding insurance and utilities, the monthly payment is still unattainable for the majority of people," says the video's creator. The video concludes by examining the average home price in Mississippi, the cheapest state in the US. Even in Mississippi, the required income to meet Ramsey's criteria is still very high. This analysis raises questions about the practicality of Ramsey's advice in the current economic climate and prompts a discussion about more realistic financial strategies for homeownership.
