I Want to Buy a House. Will Home Prices Ever Return to Normal?

On this episode of the Money Confidential podcast, host Stefanie O’Connell Rodriguez turns to Daryl Fairweather, Ph.D., chief economist at real estate brokerage Redfin, about today's housing market.

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Every Monday on the Money Confidential podcast, host Stefanie O'Connell Rodriguez, a nationally recognized money expert, delves into your (confidential) money problems and delivers smart, practical, and completely doable solutions that will help you work toward your ultimate financial goals. This is the place to come for real talk about money—and real solutions that actually work.

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On This Episode

Real estate prices are extremely high, and now mortgage rates are also rising. Has first-time homeownership ever felt more out of reach? On this week's episode, host Stefanie O'Connell Rodriguez talks to Daryl Fairweather, chief economist at real estate brokerage Redfin, about what today's housing market means for prospective buyers, plus whether it makes more sense to buy or rent right now.

Meet Our Caller

"Isabelle" is a 20-something prospective homebuyer, living in a small rural community with her partner. Isabelle and her partner are both independent contractors and they are currently staying with Isabelle's mom while saving up as much as possible for a down payment on a house. With the recent rise in interest rates, and the hyper-competitive housing market, Isabelle is feeling a sense of urgency to buy soon—but she also wants to make a sound financial decision that she won't regret later on.

Anonymous Caller "Isabelle"

"It feels like we don't have a lot of guidance when it comes to home-buying, especially now, when it feels like the market is unprecedented."

—Anonymous Caller "Isabelle"

Meet Host Stefanie O'Connell Rodriguez

Money confidential podcast - host, Stefanie O'Connell Rodriguez
Caroline White Photography

Stefanie is a nationally recognized personal finance expert ready to talk work, worth, and money with unapologetically ambitious women. Her work has been featured in The Wall Street Journal, The New York Times, USA Today, Cosmopolitan, Glamour, and Oprah Magazine, and Stefanie has appeared on ABC World News, CBSN, Fox & Friends, Fox Business, Bloomberg, The Dr. Oz Show, The Doctors, and more to share her smart, practical solutions to any money problem.

Meet Our Expert, Daryl Fairweather, Ph.D.

Dr. Daryl Fairweather headshot
Courtesy of Dr. Daryl Fairweather

Daryl Fairweather, Ph.D., is the chief economist at real estate brokerage Redfin, where she studies the housing market and the economy, and conducts research to help people buy and sell their homes. During the housing crisis, Daryl worked as a researcher at the Boston Fed studying why homeowners entered foreclosure. She has been featured on CBS News, Fox Business, Yahoo Finance, The Breakfast Club, and more.

Advice From the Episode

Daryl Fairweather, Ph.D.

"I think it's really important to think through your must-haves and your nice-to-haves and how much you're willing to spend before you get into the bidding war. Like literally, write it down on a piece of paper, and when you get into the bidding war, you know exactly how high you're willing to go and when you want to walk away."

—Daryl Fairweather, Ph.D.
  • Consider what you can afford, what is on the market, and what you would be happy with for five years. "If you're looking at what's on the market and it's just not up to your standards and you don't want to be there for five years, then renting is a completely acceptable answer." —Fairweather
  • Remember that housing isn't the only way to build wealth. "There's nothing wrong with putting your money in the stock market instead of into the housing market." —Fairweather
  • The current state of the housing market could continue for "at least a decade." So, if you see yourself wanting to settle down and buy a home at some point, "I think earlier would be better, just because you can get in before home prices go up more. But, it's not the end-all, be-all for you to do that now, as long as you're making financial decisions that can help get you to your financial goals in the long run." —Fairweather

Stefanie O'Connell

"Whatever the 'why' is behind your drive to buy a home, consider some of the other ways you might be able to fulfill those needs, so you can better evaluate whether homeownership is really the best fit for your goals."

—Stefanie O'Connell
  • Before deciding whether or not to buy a home, try to tune out all of the outside noise, and ask yourself, "Is this a home that you'll be happy in for at least five years, and can you actually afford to buy it?" —Stefanie
  • "Renting while you reassess your five-year plan is a valid choice. In the meantime, you can work on building stability or wealth or financial independence in other ways." —Stefanie

Links and Resources

Download the transcript for this episode.

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