The Clark Howard Podcast Episode: 12.23.24 – 2025 Home Price Projections & The Average 401(k) Balance

Release Date: December 23, 2024

Clark Howard welcomes listeners to the final episode of the year, celebrating both Hanukkah and Christmas—a rare occurrence where both holidays overlap. The episode delves into crucial financial topics: projections for home prices in 2025 and alarming statistics about the average 401(k) balances as individuals approach retirement. Additionally, Clark addresses several listener questions ranging from credit card security to pool liability.

1. Home Price Projections for 2025

Clark begins by analyzing the real estate market, presenting an educated forecast for home prices in 2025. He acknowledges the challenging landscape buyers have faced in recent years, characterized by high home prices and elevated mortgage rates. However, Clark remains optimistic that affordability will improve over time due to increasing incomes.

Clark Howard [06:00]: "As people's income rises over time, the affordability of houses will become more favorable."

He explains that while mortgage rates are unlikely to drop drastically, the growing inventory of homes for sale and a stabilization of prices suggest that the worst conditions for buyers are behind us. Clark emphasizes the concept of "reversion to the mean," indicating that the market will normalize, preventing sustained unaffordability.

Clark Howard [07:30]: "We're going to see home prices not really going anywhere over 25, maybe 26 moving forward. That prices are basically stalled out."

For sellers, Clark shares reassuring news: the rapid price increases of the past are unlikely to continue, creating a stable environment. He notes that while some local markets may experience declines, overall home prices will remain steady, ensuring that seller conditions remain favorable.

2. The Average 401(k) Balance

Transitioning to retirement savings, Clark highlights concerning statistics about the average 401(k) balances for those nearing retirement. He references a Vanguard report indicating that while the average balance appears robust at a quarter-million dollars, the median balance tells a more troubling story.

Clark Howard [17:00]: "The average person's balance is just about a third of that—80 something thousand."

This disparity underscores that many individuals are significantly underprepared for retirement. Clark underscores the importance of maximizing 401(k) contributions, especially when employer matches are available, to bolster financial security in retirement.

Clark Howard [19:50]: "If you work somewhere and you have a 401k and you're really not participating a lot, give yourself a Christmas gift right now. Sign into your account and increase the percent of your pay that's going into that 401k."

He urges listeners to take proactive steps in saving for retirement, emphasizing that delaying contributions can have long-term negative effects on financial well-being.

3. Listener Questions

Clark addresses several listener-submitted questions, providing practical advice on various financial and consumer topics.

a. Discover Card’s Virtual Card Numbers

Linda from North Carolina [07:50]: Inquired about the security of Discover Card’s electronic virtual card numbers.

Clark affirms the enhanced security benefits, explaining that virtual card numbers act as one-time use authorization numbers, safeguarding the actual credit card details.

Clark Howard [08:13]: "It absolutely is more secure... they give you these options of generating a one time use card number when you pay."

b. Using Transponders with Rental Cars

Paul from South Carolina [08:52]: Asked about the risks of using E-Z Pass transponders in rental vehicles.

Clark recommends using portable toll readers that can be easily registered and deregistered with each rental, preventing unauthorized charges.

Clark Howard [09:59]: "Money saving having this and it has worked for me. I've never had a problem..."

c. Borrowing Home Equity to Pay Off Debt

Casey from Georgia [12:10]: Considered taking out a home equity loan to clear $16,000 in credit card debt and a $2,200 hospital bill.

Clark cautions against this approach due to behavioral risks, such as accruing new debt, unless Casey is certain she can avoid reusing credit cards. He advises evaluating the ability to commit to repayment without resetting debt traps.

Clark Howard [12:47]: "If you know in your heart of hearts that you will absolutely not use any of these cards moving forward... good decision."

d. Establishing Credit for a Teenage Daughter Purchasing a Car

Shane from Wisconsin [21:54]: Sought advice on whether his 16-year-old daughter should take a loan to buy a car or pay cash.

Clark suggests utilizing credit unions that offer secured vehicle loans, allowing his daughter to build credit responsibly without the need for a co-signer.

Clark Howard [22:14]: "She would be establishing good credit and likely she would not need a co-signer because the money she's worked hard for and saved would be her security against the loan payments."

e. Liability Safety for Pool Owners

Dara from Maryland [24:14]: Asked about liability safety measures for new pool owners.

Clark recommends installing sturdy fencing, pool alarms, and considering an umbrella insurance policy to mitigate liability risks effectively.

Clark Howard [24:40]: "They may want you to have one of those pool alarms. This is a very wonderful safety device... it prevents tragedy by that alarm going off."

4. Product Recommendations and Consumer Advice

In the final segments, Clark provides recommendations on consumer products based on personal experiences and listener feedback.

a. Carry-On Luggage

Jim from Michigan [26:38]: Sought advice on finding a carry-on bag that fits airline overhead bins.

Clark endorses the Members Mark bag for its consistent fit across most airlines, excluding some regional jets. He emphasizes looking for smaller dimensions if concerned about specific airline restrictions.

Clark Howard [27:06]: "The Members Mark bag fits with ease in every plane I've ever been in... except on Canadian regional jets."

b. Toilet Paper Preferences

D from Unknown Location [28:18]: Concerned about the softness of Kirkland Signature toilet paper.

Clark shares his preference for alternative private labels like Sam’s Club’s Members Mark and premium brands like Quilted Northern, while acknowledging personal preferences vary.

Clark Howard [29:44]: "If the Kirkland signature toilet paper isn't working for you, believe it or not, you can take it back to Costco and they will refund your money, no questions asked."

Conclusion

As the episode wraps up, Clark Howard extends heartfelt holiday wishes to his listeners, reminding them of the importance of financial preparedness and prudent decision-making. He announces a short break before resuming with new content in January 2025, promising "best of" episodes featuring the most impactful advice from the past year.

Clark Howard [32:08]: "Hope you have just a absolutely wonderful holiday season... we will be back here with the podcast and the YouTube show on January 3rd."

Listeners are encouraged to visit Clark’s websites, clark.com and clarkdeals.com, for ongoing financial resources and consumer advice.

This episode serves as both a year-end reflection and a forward-looking guide, equipping listeners with essential insights to navigate the upcoming financial landscape confidently.