During a recent podcast appearance, comedian Theo Von asked Dave Ramsey for his take on the ongoing housing crisis. Ramsey responded by stating that millennials and Gen Z complain about not being able to afford homes, but he argues that housing has always been expensive. He recounted an NPR interview where someone mentioned their daughter couldn’t afford a house despite working two jobs as a dancer and a barista. Ramsey maintained that these jobs don’t typically lead to high enough incomes for homeownership, suggesting that the issue isn’t a failing system but rather a matter of choosing the right career path.
While Ramsey’s point about the importance of career choices holds some truth, his argument doesn’t fully encompass the current housing market realities. It’s undeniable that housing costs have risen significantly faster than incomes over the past few decades. For instance, in 1980, the median family income was $21,020, and the median home price was 2.24 times that amount. Today, the median income across major U.S. cities has risen to $77,345, but the median home price can range from three to ten times that amount, depending on the location. This widening gap between income and home prices is making it increasingly challenging for middle-class families to afford homeownership.
The National Association of Realtors’ Housing Affordability Index further illustrates the changing landscape. In May 2024, the index stood at 93.1, down from 208.1 in 2012. This decline signifies a worsening affordability situation, with a value of 100 indicating that a family with a median income could comfortably afford a median-priced home. The falling index suggests that homeownership is becoming less attainable for many Americans.
While Ramsey’s emphasis on hard work and perseverance is commendable, it’s crucial to acknowledge the multifaceted challenges facing younger generations. The current housing market presents unique obstacles that weren’t as prevalent in previous decades. Simply advocating for hard work doesn’t fully address the complexities of affordability and the growing gap between income and home prices. The housing crisis demands a more nuanced understanding that considers both individual responsibility and systemic factors influencing the market.
