Personal Finance

Suze Orman says you should only ever buy a home if you check these 3 boxes

John Seetoo

Published: November 11, 2024 6:37 am

In just the first fews days following the Presidential election victory of Donald Trump, the response has already been reflected in renewed resurgent strength in the stock market. Nevertheless, it is important to remember that until he takes office in January, the current Biden and Harris administration is still in command, and its fiscal policies are still in effect.

Inflation-fueled high mortgage rates, inflation rates that stubbornly stay above 2%, and fewer new jobs created than newly arrived undocumented migrants this past month are the status quo at the time of this writing. Therefore, the inherent hazards in such an economic climate have yet to subside.

Popular media celebrity and financial advisor show host Suze Orman is well respected for her candid opinions and financial literacy. Her numerous New York Times best-selling books, TV show appearances, and radio and podcasts programs catapulted her twice to Time magazine’s “Top 100 Most Influential People” list. 

• Also: Take this quiz to see if you’re on track to retire^(Sponsored)

Suze Orman’s Real Estate Purchase Warnings

On Suze Orman’s Women & Money podcast, she weighed in on the US housing market, citing three important criteria to consider before attempting to purchase a home:

1. Sufficient money for the down payment.
2. A secure and stable job with ostensibly reliable wages.
3. The ability to comfortably afford monthly payments, inclusive of mortgage, insurance, property taxes, and maintenance.

She also warned of  a number of detrimental factors that any prospective homebuyer should bear in mind:

• Few industries and jobs are truly safe – even major banks like Bank of America and tech companies, like Amazon, Alphabet/Google, and others have undergone massive layoffs over the past several months. 
• Inflation is still high, and Orman believes strongly that the economy is in danger of entering a recession.
• Powell’s recent interest rate cuts can likely fuel inflation further, pushing both interest rate and new job creation recoveries further into mid-to-late 2025 before the coast would presumably be clear. 

Other Real Estate Considerations – Why Waiting to 2025 May Be A Plus

I concur with the general precepts that Suze Orman mentioned on Women & Money. There are other considerations that likely require more selective investigation, depending on region and other circumstances, that I think prospective homebuyers also need to bear in mind. I would advise waiting until later in 2025 if possible. The incoming administration’s new policies will inevitably have a significant impact on the real estate market across the nation. For example:

• In some cities like New York, housing prices, both to buy and rent, are artificially elevated, due to sanctuary cities that have been subsidizing millions of undocumented migrants, thus escalating housing demand. In the wake of President Trump’s election victory, Mayor Eric Adams has terminated free food vouchers for the migrants. Add that to the migrant caravans disbanding since the election and mass deportations, and the New York housing market may soon regain its normal equilibrium. The same can be said for a number of other urban cities. 
• The overwhelming regulatory burden on small businesses piled on over the past 4 years is a not insubstantial contributor to the anemic new jobs statistics. Cutting the red tape to return the entrepreneurial environment to the 2016-2020 era will make employment and income security a much more likely prospect, which will alleviate concerns over being able to afford monthly mortgage payments and related home buying expenses. 
• Based on campaign policy announcements, both personal and corporate tax cuts or even federal income tax elimination are all on the table. Should any of these be enacted, even at small levels, there will be a positive economic domino effect that will help to lower mortgage rates, due to lower bank financing costs and lower default rate risks. 

The above observations should not be construed to be advice, and should be viewed as opinions only. Professional counseling is advised, if such assistance is sought.