Personal finance analyst Dave Ramsey says record levels of car, student loan and credit card debt are draining the disposable income young Americans need to enter the housing market and the timing could not be worse, with mortgage rates hitting a three-month high just as the spring buying season opens.

Debt Burden Locks Out Buyers

“Corporate America has screwed you,” Ramsey told Fox Business’ Cheryl Casone on the network’s special “Hitting Home: Rebuilding the Dream.” “Car debt is at an all-time high. Student loan debt is at an all-time high. And, of course, credit card debt is at an all-time high.”

The debt burden is compressing disposable income precisely when first-time buyers need financial flexibility most. “When you’re drowning in personal debt, you can’t afford to buy a freaking house,” Ramsey said.

Mortgage Rates Climb Further

The macro backdrop is worsening that affordability squeeze. The 30-year fixed mortgage rate rose to 6.22% for the week ending March 19, up from 6.11% the prior week, according to Freddie Mac its highest level in more than three months. The Iran conflict has pushed the 10-year Treasury yield to 4.26%, from 3.96% before fighting began, lifting borrowing costs across the housing market.

Housing Demand Shows Weakness

Mortgage applications fell nearly 11% week over week. New single-family home sales dropped nearly 18% in January from the prior month and were down 11.3% year over year, according to the Census Bureau.

Housing Stocks Reflect Pressure

Shares of housing-adjacent companies have reflected the pressure. Rocket Companies Inc. (NYSE:RKT), Zillow Group Inc. (NASDAQ:Z) and Opendoor Technologies Inc. (NASDAQ:OPEN) each declined in recent sessions as investors weighed higher borrowing costs against an uncertain demand outlook.

Policy Relief Offers Limited Support

Policy relief is emerging on the margins. The Federal Housing Finance Agency last week eased insurance requirements for Fannie Mae (OTC:FNMA) and Freddie Mac (OTC:FMCC) mortgages, allowing cheaper Actual Cash Value roof coverage for single-family homes and condominiums. The Trump administration also cited $200 billion in mortgage-backed securities purchases, which it says have lowered homebuyer costs by $5,000.

Ramsey Urges Debt Reset

Ramsey argued the path to homeownership still exists, but runs through aggressive debt reduction first. “Clear this debt, get rid of the stupidity, and chop up the cards,” he said. “Once you do that, you can get there.”

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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