Ellie from Rockford, Illinois, recently called The Ramsey Show seeking advice about her housing dilemma. Her husband started a new job requiring him to relocate every two to four years, likely continuing over 12 years.
Don't Miss:
Their current home is fully paid off but valued at $150,000 in a slow-growth market, so Ellie is wondering whether they should buy or rent in each new city, where she states that home prices range from $300,000 to $400,000.
Ellie's concern isn't just financial - she doesn't want to live in a bare-bones apartment during this transitional phase of their lives. However, buying and selling homes every few years comes with significant risks.
Trending: Unlock the hidden potential of commercial real estate -- This platform allows individuals to invest in commercial real estate offering a 12% target yield with a bonus 1% return boost today!
Dave Ramsey advised Ellie to focus on the local real estate market conditions in each new city to make her decision. He laid out two key factors for her to consider:
1. Home Price Appreciation Rates
Ramsey recommended asking a real estate agent to provide the average appreciation rate in a 5-10 mile radius around the neighborhood they want to live in and looking at those numbers over the past few years. Ramsey noted that markets with strong growth - such as 10% annually - could offer opportunities to build equity even in a short time frame.
2. Days on Market (DOM)
This figure measures how quickly homes sell in a particular area. Ramsey said that a hot market with low DOM (e.g., seven days) can make it easier to resell the house when it's time to move again. However, in slower markets with high DOM, selling could become a costly and time-consuming process.
Trending: Over the last five years, the price of gold has increased by approximately 83% -- Investors like Bill O'Reilly and Rudy Giuliani are using this platform to create customized gold IRAs to help shield their savings from inflation and economic turbulence.
Combining these two metrics allows frequent movers like Ellie to assess whether buying makes financial sense or renting is safer.
Recent U.S. housing market trends further highlight the risks of frequent home purchases. According to the Freddie Mac House Price Index, prices rose for 12 consecutive years, with an unprecedented 18% surge in 2021.