Money Guy Show – Episode Summary

Episode: Can You Still Buy a Home in 2025? | Ask Money Guy
Release Date: August 27, 2025
Hosts: Brian Preston & Bo Hanson

Episode Overview

In this episode, Brian and Bo tackle the pressing topic of homebuying in 2025—a period marked by persistently high interest rates, inflated home prices, and financial anxiety for aspiring homeowners and recent buyers. They answer listener questions about navigating mortgage challenges, refinancing options, house hacking, and broader personal finance issues, ultimately providing pragmatic strategies for those seeking to buy a home or make sound financial decisions in this difficult market.

Key Discussion Points & Insights

1. Homebuying in a High-Interest Rate Environment

• "Marry the house, date the rate," is still common wisdom, but Brian notes it hasn’t worked well for recent buyers expecting a prompt rate drop and refinance opportunity. Many now face higher payments and regretful decisions.

  • [01:27] Brian: “A lot of people bought at higher rates thinking they would be able to refinance down. In some cities, you’ve actually seen the value of homes come down… It makes this dating relationship seem more toxic.”

• Current Average Rate: As of July 3, 2025, the national average 30-year fixed mortgage is 6.7%—a steep rise from pre-pandemic lows.

  • [01:50] Bo: “Buyers now are sitting in mortgages at these elevated rates.”

Strategies to Determine Affordability

• Use resources like the Money Guy’s Home Buying Calculator and Checklist:

  • “Play with your numbers; see if you’re in the appropriate parameters to make sure you don’t overbuy.” [02:41] Bo

• Emotional Discipline:

  • [03:27] Brian: “Measure twice, cut once. Don’t let emotion drive the decision; balance it with analytics.”

2. Options for Current Homeowners Facing High Rates

a. Rate Modifications & Recasting

• Rate Modification: Ask your lender if you can pay a fee to lower your rate without a full refinance.

  • [04:45] Bo: “Many credit unions or lenders will let you pay a fee to modify your rate down—without doing a full closing.”

• Recasting: Make a large principal payment, then have your loan recalculated at a lower payment (not rate), thus freeing up cash flow.

  • [06:03] Bo: “This will allow you some reprieve in monthly cash flow… It can get your payment below 25% and free up your budget for other goals.”

b. Refinancing

• As rates begin to soften, refinancing becomes increasingly viable. Weigh closing costs and expected tenure.
  • [07:25] Bo: “Is now the right time to refi? Analyze if the interest savings will overcome fees in the time you’ll be in the home.”

3. Alternative Approaches

a. Income/Expense Levers & “House Hacking”

• Increase income or cut expenses—but both have limits. If burdened by housing costs, consider taking in a roommate or renting part of your home (“house hacking”).
  • [09:11] Brian: “There’s nothing wrong with house hacking—it’s completely legal and a cool way to take advantage of the current economy.”

b. Considering Selling

• If you’re overextended (“bought way too much house”), and can sell without significant loss, it may be wise to exit.
  • [09:59] Bo: “Just because you made that decision doesn’t mean you have to be locked in… Homes are use assets, not investment assets.”

c. Treat Your Home as a “Use Asset”

• Don’t bank on primary residence appreciation as your path to financial independence.
  • [10:53] Bo: “We think of homes as use assets, not wealth-building assets. If you’re banking your future on it, reconsider that.”

4. Listener Q&A Highlights

Q1: Refinancing to an ARM – Risks & Rewards ([11:51])

Scenario: Listener asks about refinancing from fixed 7.625% to 5.5% 7/1 ARM on a “starter home” with plans to move within 7 years.

• Bo: Key risk is if rates are higher when the fixed period ends or if moving falls through. “It’s not a strategy you 100% should avoid—but weigh the risks and be honest about your timeline.” [13:28]
• Brian: For genuinely short timelines, ARMs can be tactical. But ask: should you even buy if you plan to stay less than 7-10 years, given current market volatility? [14:32]

Q2: Managing Fees on HSAs ([19:11])

• Solution: Move your HSA balance to a low-cost provider (e.g., Fidelity) if allowed.
  • Bo: “If your HSA balance is large enough, consider transferring assets to a low-cost provider, where you get access to good investments and low/no fees.” [20:00]

Q3: Balancing Emergency Fund vs. Retirement Contributions ([22:32])

DJ asks: Should I stop HSA and reduce 401k contributions to fund an emergency fund, given 423k in 401k at age 40?

• Brian: “Emergencies are not if but when… Get the free employer match, but let’s protect you and fill that bucket up.” [23:12]
• Bo: “If you’re very lean, you’re far enough out there that one thing could push you to credit cards. Fill emergency fund, then get back to saving quickly.” [25:02]

Q4: Why is the Safe Withdrawal Rate Only 4%? ([27:47])

• Bo: “Market returns are volatile, not linear. The 4% rule helps avoid running out of money in bad markets—sequence of returns risk is real.” [28:09]
• Brian: “Be conservative with assumptions. Your financial life is personal; 4% is a planning tool, but real-life withdrawals are dynamic.” [29:57], [32:04]

Q5: Timing Sale of Investments for Large Purchases (e.g., Car) ([34:58])

• Bo: “If you know you’ll spend that money in 12-18 months, better to pull it out now and park it in a high-yield account to avoid market risk.” [35:23]

Q6: Tiered 401k Matching—How Much Should You Save? ([37:56])

• Bo & Brian’s Rule: Always contribute enough to get the entire employer match, even if the structure is complicated.
  • Brian: “50 cents on the dollar is still a great return. Put in the 6% to get the full match.” [39:11]

Q7: Is Maxing Out a Generous Employer Match Irresponsible if Emergency Fund is Incomplete? ([45:47])

• Bo: “Step two—get all the free money. But… with a young child and no liquidity, is there a way to do both? Don’t assume high debt is okay as a fallback.” [47:24]
• Brian: “Be honest about your risk exposure. Maybe you split contributions so you build emergency fund and still get some match.” [48:09]

Q8: Thoughts on House Hacking ([39:53] then deep-dive [40:41])

• Brian: “I love house hacking. You’re maximizing the system legally—using other people’s money to pay for your primary home with bank’s preferred rates.”
• Bo’s cautions: Don’t overextend; can you float the mortgage without a roommate if needed? Also, does it fit your stage of life?
  • [42:45] Bo: “3D plan: dream, down-to-earth, and ‘doo doo’—what if things go wrong?”

Q9: Client Interest in Bitcoin/Crypto ([52:22])

• Brian: Less than 3% of his clients ask about it; more from younger demos. Suggests caution—volatile, speculative, and potentially a “trap” with IRS oversight.
• Bo: Open-minded but not investing himself, citing lack of cash flow/utility. Don’t treat speculative assets as wealth-building core or emergency fund.
  • [55:23] Brian: “I dabbled in Bitcoin and Ethereum… it’s not a currency, it’s a speculative play.”

Notable Quotes & Memorable Moments

• “Measure twice, cut once.” — Brian, reminding listeners to carefully analyze homebuying decisions ([03:27])
• “It’s hard to eat the house.” — Bo, on housing as a use asset, not an investment ([11:26])
• “If you’re banking all of your future financial security on the home that you live in right now, I would reconsider that.” — Bo ([10:53])
• “House hacking is one of the great ways you’re maximizing the housing system legally.” — Brian ([40:47])
• “If you’re not going to stay in this house for seven years, should you even be buying a house with where interest rates are?” — Brian ([14:32])
• “Emergencies are not if, but when… get the free employer match, but let’s make sure you’re protected.” — Brian ([23:12])
• “The thing that makes [Bitcoin] more valuable is someone coming along behind and being willing to pay more for it.” — Bo ([54:03])

Timestamps for Important Segments

• [01:27] Strategy for high-rate homebuyers: “Marry the house, date the rate”
• [03:27] Emotional vs. analytical homebuying
• [04:45] Rate modification and recasting options
• [07:25] When refinancing makes sense
• [09:59] When to consider selling your house
• [11:51] Risks and logic of ARMs vs. fixed mortgages
• [19:11] Solution for high-fee HSAs
• [22:32] Emergency fund vs. retirement savings prioritization
• [27:47] Why is the safe withdrawal rate 4%? Trinity Study explainer
• [34:58] When to sell investments for near-term expenses
• [37:56] Navigating complex 401k match formulas
• [39:53] [40:41] Pros and cautions of house hacking
• [45:47] Building emergency funds vs. max 403b match dilemma
• [52:22] Crypto/BTC interest among clients and their role in financial plans

Final Thoughts

Brian and Bo weave practical advice and caution, confronting the real pressures facing homebuyers and wealth builders in 2025, with a mix of tactical strategies, relatable stories, and “financial mutant” thinking. They stress knowing your numbers, preparing for risk, and utilizing available tools (calculators, checklists, high yield accounts) to make wise, personalized financial decisions, whether you’re buying a home, house hacking, or considering speculative investments.

For more calculators and resources, visit: moneyguy.com/resources

Summary compiled to capture the entire value and actionable insights of the podcast for listeners and non-listeners alike.