Dave Ramsey Warns 23-Year-Old Homebuyer: Don't Skip This Critical Step Before Buying Your First House

Many young Americans aspire to purchase a home. Financial expert Dave Ramsey and co-host George Kamel recently spoke to 23-year-old Jared from Oklahoma City, OK, about his aspirations for home ownership. While they were impressed by his work ethic and savings, Ramsey pointed out that he was missing one crucial step: establishing a solid emergency fund. 

Jared is single and does "nothing but work" at his pest control job, making about $70,000 a year. He told the Ramsey Show hosts he'll have a 20% down payment for a $150,000-$200,000 home saved by mid-January. And while he doesn't have any debt, he did admit that he doesn't have an emergency fund. 

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Ramsey applauded Jared's efforts but stressed that an emergency fund is an absolute must when purchasing a home. "You don't move into a house without an emergency fund," Ramsey said. "‘Cause houses are an emergency looking for a place to happen."

Ramsey illustrated the reality of home ownership: unexpected repairs and maintenance costs will always arise. He and Kamel advised Jared to save three to six months' living expenses in an emergency fund before finalizing a home purchase. 

"Which means now you're looking at March," Ramsey stated, instead of Jared's initial goal of purchasing in January. 

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Jared's goal of a 20% down payment aligns with Ramsey's typical advice when purchasing a home – especially because it allows him to avoid private mortgage insurance (PMI), a monthly fee required for loans with smaller down payments. With a $150,000 to $200,000 home, Jared would save thousands over the life of the loan by meeting this threshold. 

Kamel and Ramsey also told Jared to stick to a 15-year-fixed mortgage rather than a 30-year loan. "A paid-off home mortgage is one of the keys to being a Baby Steps millionaire," Ramsey said, referring to his widely followed seven-step financial plan.

In addition to financial preparation, Ramsey advised Jared to avoid purchasing a fixer-upper or a home with unique features that could make it harder to resell. "Buy something that’s easy to resell, which means it’s kinda boring," he said, noting that such homes tend to appreciate steadily over time.

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George Kamel shared a personal example, recounting how his first home – a modest three-bedroom townhome – appreciated significantly during his three years of ownership.

Jared's location in Oklahoma City puts him in a housing market that remains competitive but relatively affordable compared to national averages. According to Redfin, the median home price in Oklahoma was $244,400 in October 2024, a 3.4% increase from the previous year. Homes typically spend about 40 days on the market and sales activity has risen by 4.6% year-over-year.

These market dynamics suggest that Jared could find opportunities to purchase a home within his price range, especially if he avoids properties that need extensive work.

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