Home Prices Hit $408,800 as Ramsey's 25% Rule Proves Elusive
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- Dave Ramsey advises keeping housing costs at or below 25% of take-home pay, warning that anything beyond risks leaving no margin in monthly budgets.
- Mortgage rates have climbed back to the 6.3–6.5% range, reversing a brief February dip below 6% and squeezing buyer affordability.
- CPI inflation jumped from 2.4% to 3.3% in March per the Bureau of Labor Statistics, a signal that elevated prices may persist longer than anticipated.
- Median existing-home sale prices reached $408,800 in March—marking the 33rd consecutive month of annual price gains, according to the National Association of Realtors.
- Lynette Arrasmith of Churchill Mortgage says the 25% rule is 'very attainable' for some buyers but 'a struggle' for others.
- Ashley Harris of Neighbors Bank calls the 25% guideline 'generally not realistic' for most first-time buyers.
- Dave Meyer, BiggerPockets CIO, argues the US has experienced exactly one housing market crash in the last century and its underlying drivers are absent today, with home prices typically rising about 3.5% annually—far slower than pandemic-era spikes.
Why it matters: For prospective buyers facing a $408,800 median price and 6.3–6.5% mortgage rates, the 25% rule has become mathematically hard to clear—yet BiggerPockets' Dave Meyer says panic is misplaced because the lending excesses and speculative dynamics that triggered 2008 aren't present in today's market.
