{"id":55664,"date":"2025-07-11T02:14:08","date_gmt":"2025-07-11T02:14:08","guid":{"rendered":"https:\/\/www.europesays.com\/us\/55664\/"},"modified":"2025-07-11T02:14:08","modified_gmt":"2025-07-11T02:14:08","slug":"dave-ramsey-saves-listener-with-1-million-in-her-401k-from-becoming-a-victim-of-the-real-estate-market","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/55664\/","title":{"rendered":"Dave Ramsey Saves Listener With $1 Million in Her 401(k) From Becoming a \u2018Victim of the Real Estate Market\u2019"},"content":{"rendered":"

On his namesake radio show, Dave Ramsey <\/strong>addressed the growing debate about renting vs. owning<\/a> while speaking to a 58-year-old Chicago homeowner<\/a> who\u2019s considering downsizing<\/a> and selling her paid-off $350,000 house.<\/p>\n

One factor<\/a> in her decision was her well-established emergency reserve and\u00a0$1 million in 401(k), keeping her sufficiently funded for her upcoming retirement.<\/p>\n

While renting over buying might seem safe and financially sound to some, Ramsey told her she could become a \u201cvictim of the real estate market\u201d if she went through with it\u2014and other experts agree.<\/p>\n

What Dave Ramsey advises retirees\u2014and how renters compare today<\/p>\n

\u201cRenting for 30 years means you are a victim of the real estate market instead of riding the wave,\u201d Ramsey explained<\/a>. \u201cThink about what rents have done in the last 30 years, and think about what they\u2019re going to do during the 30 years that we\u2019re talking.\u201d<\/p>\n

Steve Sexton<\/strong>, CEO of Sexton Advisory Group<\/a>, agrees with Ramsey that renting indefinitely can become a financial trap, especially for someone with a strong income and savings.<\/p>\n

He notes that rents have climbed dramatically in recent years, and for many people nearing retirement, that instability can disrupt a well-planned budget.<\/p>\n

\u201cIf you\u2019re financially disciplined and understand your monthly expenses, locking in a fixed mortgage can give you long-term predictability while turning your monthly housing cost into equity, and not just an expense,\u201d he adds.<\/p>\n

Ramsey offered another option that could make financial sense\u2014especially for older buyers and sellers: downsizing to a condo.<\/p>\n

Downsizing can be a sound move for older homeowners and could save them thousands of dollars, especially when they retire and transition to a fixed income.<\/p>\n

The listener explained that she didn\u2019t want to deal with the hassles of a big house anymore, as her children had moved and she was tired.<\/p>\n

With that in mind, it\u2019s clear to see why she considered renting: When you rent, repairs and issues are taken care of for you, which alleviates many of the headaches and costs of homeownership.<\/p>\n

But to Ramsey\u2019s point, renting might not be more financially prudent than downsizing to a smaller home, given Chicago\u2019s high transaction costs.<\/p>\n

According to Realtor.com\u00ae<\/a> data, the median rent for a one- to two-bedroom in Chicago was $1,793 in May, a welcome 1.5% year-over-year decline but an eye-popping 15.1% six-year change.<\/p>\n

A Realtor.com report<\/a> also noted that 25% tariffs on steel and aluminum could increase rent prices, \u201cas developers may slow construction or pass higher expenses on to tenants.\u201d<\/p>\n

Meanwhile, the median home list price in Chicago in June was $350,000, with the median home list price per square foot at $276, according to Realtor.com<\/a>. This price tag is below the national median price of $440,950<\/a> for homes in June.<\/p>\n

Bobbi Rebell<\/strong>, certified financial planner and personal finance expert at CardRates.com<\/a>, says this situation reveals that not all homeownership is the same.<\/p>\n

\u201cShe can get the benefits she wants from renting by buying a condo: low hands-on maintenance, for example, by owning a lower-maintenance home. Specifically, by buying a new condo that has services built in through a homeowners association, she can get the easier and less stressful lifestyle she wants,\u201d she adds.<\/p>\n

Rebell notes that the challenge with renting, especially as you move into retirement years, is that it can be risky financially because you are at the landlord\u2019s whim.<\/p>\n

\u201cNot only could a landlord raise your rent, they could simply decide they don\u2019t want to rent out the unit anymore and ask you to leave. Even in areas where there are tenant protection laws, being in conflict with your landlord is not a hassle or stress you want to have when what you really want is peace and relaxation, and an easier, lower-maintenance lifestyle,\u201d Rebell explains.<\/p>\n

Stacy Brown<\/strong>, senior director of training at Real Property Management<\/a>, says that for individuals who are financially disciplined and have clarity around their monthly budget, the predictability of a fixed-rate mortgage (even with occasional maintenance costs) might prove more manageable in the long run than the uncertainty of annual rent increases.<\/p>\n

\u201cMoreover, ownership offers a hedge against inflation and the opportunity to build or preserve equity,\u201d she added.<\/p>\n

Why a condo could be the best of both worlds in Chicago<\/p>\n

That\u2019s why Ramsey offered the caller the alternative. Moving to a condo could be the best of both worlds, as it would represent a downsize, while not wasting money on rent.<\/p>\n

He pointed out that at her home equity level, which is around $350,000, she could afford a condo with lower costs, less maintenance, and fewer unknowns.<\/p>\n

The median condo price in Chicago is around $350,000 in 2025, according to Realtor.com<\/a>.<\/p>\n

While a condo is priced similarly to her current home, it offers perks like HOA-managed maintenance and predictable costs\u2014benefits that can be especially appealing to retirees.<\/p>\n

Brown also notes that in Chicago, where property taxes, snow removal, and maintenance can be daunting, condo living can offer the perfect hybrid model.<\/p>\n

\u201cThe buyer gains ownership and equity preservation, but with shared responsibilities and often lower total maintenance costs,\u201d she says. For someone with $350,000 in home equity, it\u2019s entirely feasible to purchase a modest, well-managed condo outright or, with a small mortgage, leaving retirement savings untouched or minimally affected.<\/p>\n

Rebell adds that a condo with new appliances and finishes is unlikely to need maintenance and is a great situation for someone looking to reduce their hands-on involvement with their home.<\/p>\n

\u201cIf the condo has an HOA, that can serve as a way to avoid direct day-to-day involvement in maintaining the grounds or any building-wide maintenance and keep in step with an easier and less stressful lifestyle,\u201d she adds.<\/p>\n

This option can make sense for individuals in this caller\u2019s situation as it enables them to own without overextending, and maintain the ability to free up some of that 401(k).<\/p>\n

Sexton notes that another key point in Ramsey\u2019s advice was the focus on buying within your means.<\/p>\n

\u201cI always tell my clients that just because they can afford more doesn\u2019t mean they should buy higher. Later in life, you want to maintain access to your retirement accounts and not overleverage. Buying a home should strengthen your financial position, not strain it. If you can purchase something manageable while keeping your 401(k) intact, you\u2019re setting yourself up for a more secure and flexible retirement,\u201d he adds.<\/p>\n

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