Dave Ramsey is a successful fellow with a radio audience, financial freedom education, wrapped in a sort of Christian mantle. That statement will either bewilder, chill, or thrill his fans.
Let’s concede that Ramsey makes several intelligent, useful, and common-sense financial advice points that have benefited numbers of devotees. He’s achieved success due in good measure through dedication and hard work, by applying his gifts.
There are some in our nation that because a performer or some famous person they like weighs in on a topic are influenced by that personality, but why? Just because someone is successful – or correct on certain things – doesn’t mean they are right about everything. Each of us are wise to apply the principle of separating the wheat from the chaff with every person, organization, or information source. That ancient and proven principle comes from Above, not me.
Ramsey takes a periodic shot at what he calls mobile homes, which ironically reveals his lack of knowledge of the topic. There’s been no ‘mobile homes’ built in America since June 15, 1976. That was the date that HUD Code manufactured homes was born. There is an evolutionary connection, but the two are not the same thing, as the quote from an informed legal expert shown below reflect.
Noting that not all mobile homes were built to the same standards as manufactured homes, let’s mention that numbers of older ‘true’ mobile homes built before that 6.15.1976 date either had standards similar to what HUD Code manufactured housing has, or have since been updated. Other mobile, didn’t meet those standards, which is why the HUD Code was passed into law. So, dismissing the value of a pre-HUD Code mobile home without knowing more about a specific home would be a mistake.
That backdrop is enough to address the headline topic.
What Ramsey contends – that you will lose money if you buy a mobile or manufactured home – has been debunked by the federal government several times. For instance, the FHFA referenced their research that manufactured homes can and so appreciate in value in 2018. It has also been disproven by the National Association of Realtors (NAR) in their deep, seminal 2018 study.
At about the 4:50 mark of this video below, Ramsey says about ‘trailers’ or ‘mobile homes’ that “If you are in that business, I’m not mad at you. But the data in the marketplace says the marketplace doesn’t respect your product.” That statement – as applied to resale values – is clearly mistaken, based upon the third-party, including university-level researched information noted above and linked further below. That said, in fairness, Ramsey is right that manufactured homes are misunderstood, including, it seems by him.
Dave, with all due respect, on this appreciation issue — the third party evidence says you’re wrong.
In the video above Ramsey is all over the map, saying somethings that are accurate about factory-built housing, and other things that are simply not so. Once more, think separate wheat from chaff. But he admits – for instance – that the durability of a factory-built home can be as good or better than a ‘stick built house.’ That’s true. Who says? HUD Secretary Carson, among others, who has toured areas struck by tornadoes where some manufactured homes survived better than some conventional housing did. But his correct point begs a related one. If they are as more durable, then doesn’t that mitigate against his concerns? It should.
Note that the points made by Secretary Carson have been made here on MHLivingNews years before he came into office. As new readers will learn below, the Obama Administration as well as the Trump Administration each provided independent research that points to the quality, durability, and value of modern manufactured homes. This isn’t a partisan issue, the facts are what they are. Lawmakers who have researched the issues from both major party divides have mutually agreed on that value.
The cure to misinformation for Dave or any others who hold a similarly incomplete view is to get more accurate information. Once the truth is known, the honorable and teachable person adjusts accordingly.
The other point that Ramsey makes near the end of that video, at about the 5:30 mark – he is talking about an RV, not a mobile or manufactured home. This video by Ramsey is a good example of why the correct terminology is so important. An RV is not a mobile home, nor is it a manufactured home. A manufactured home and a modular home have similarities, but they have differences too. See what the nonprofit below had to say about that, based upon their evidence-based research.
A few more points about Ramsey’s thinking before moving on to home valuations.
A trailer is something you can pull behind a car or truck. We never recommend that anyone call a mobile home or a manufactured home a trailer house. By the time the mobile home era – which came after the trailer house epoch – came along, the homes were too big to be moved by a common pickup truck. They needed specialized, heavier moving equipment – which for years people in the industry have for some reason dubbed a ‘totter.’
When Ramsey is talking about a ‘car you sleep in’ going down in value, there is truth to that – about RVs. The RV industry doesn’t claim that their product appreciates, which is all that need be said about that topic.
Near the end of Ramsey’s video he says that the home the caller is asking about may not be going down, it may even be going up in value. But it may not go up as fast as a conventional house. That demonstrates that Ramsey’s thinking is all over the map, and part of his and his listeners challenge is that he conflates the terminology, which must then be unpacked, corrected, and then can be learned from.
Bottom line, Ramsey’s right on some things, wrong on others. One must separate the wheat from the chaff.
Why Any Housing Appreciates or Depreciates
Conventional housing or manufactured homes can increase or decrease in value for the same basic reasons.
- Local economic, jobs, and other market conditions.
- Availability of reasonable financing.
- Supply and demand.
- Condition and curb appeal of the home.
A well-maintained home is routinely going to do better at resale time than one that looks bad or has unresolved maintenance issues. For those who own any kind of housing, especially things like water leaks, gas or electrical issues should be addressed promptly. Leaks don’t fix themselves. If something is leaking, it needs prompt attention.
A good neighborhood with other well-maintained housing is routinely a safer bet than a neighborhood with numbers of unattractive or poorly maintained housing.
That said, there is research by third-party Trulia that just because some types of housing are more well maintained yet is significantly more affordable that won’t hurt the resale value of conventional housing.
Similarly, a HUD research report commissioned during the Obama Administration demonstrated that manufactured homes can and do appreciate side by side with conventional housing.
Those are well documented facts. None of them came out of thin air, they were all produced by third parties to the manufactured housing industry.
The Urban Institute in 2018 issued a report that is better than Ramsey’s but is still problematic. We’ve reviewed parts of that research at the link here, but also from a report below the byline. But let’s pull this snippet from their research.
The Urban Institute researchers said that the data on manufactured homes reveal that “Some show similar appreciation [to conventional housing], and others show slightly lower appreciation. Lower appreciation for manufactured housing may be because of the lack of financing options available for older manufactured homes, which affects resale value.” That makes the same point we did above. Access to financing is significant for resale values. That begs the question, why hasn’t the Manufactured Housing Institute (MHI), which claims to ‘represent all segments of factory built housing,’ fought for the full implementation by Fannie Mae and Freddie Mac of their Duty to Serve manufactured housing mandated by the Housing and Economic Recovery Act of 2008? More on that linked here and further below.
Last Word on Dave and Manufactured Homes
Dave Ramsey has no doubt benefited many on several pieces of advice. But on the topic of Ramsey on manufactured homes, he would do well to learn those facts noted above. If he fails to do so, then that begs the question. Ramsey and/or his listeners should ask themselves, is there some other explanation for his statements besides the factual evidence? Are those oversights by Ramsey part of his chaff?
The 2008 housing/mortgage crisis reminds everyone that when economic conditions shift, or the availability of reasonable financing becomes limited, even a well-maintained conventional house can rapidly lose value. So, that’s a reminder that homeowners and others should also work for public policies that protect and support a good economy and housing values, rather than undermine it.
Finally, as a previous report on MHLivingNews reminded readers, Florida Atlantic University (FAU) professor Ken Johnson made it clear to our readers that manufactured homes can be a good investment. See that and more in the related reports below the byline and notices.
Dave, why not put some Christian humility to work, do more homework linked from this article, and pivot to the truth about the value of buying a manufactured home, based upon this perhaps new-to-you information? Because FAU’s Johnson’s reasoning tells us that it can be a superior option for many to buy a manufactured home.
The evidence and facts matter more than perhaps commonly held prejudice and misinformation. Manufactured homes – indeed, many types of factory-built homes – are important for affordable housing seekers to consider. Who says? People that know first-hand like the Rev. Donald Tye, Jr. who raised his family in one, still owns it, and gained a significant degree of financial success because he owned factory-built homes.
Based on the evidence, we as experts agree with the Rev. Donald Tye on the points he’s made.
Pass the good word on. “We Provide, You Decide.” © (Affordable housing, manufactured homes, lifestyle news, reports, fact-checks, analysis, and commentary. Third-party images or content are provided under fair use guidelines for media.)
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By L.A. “Tony” Kovach – for MHLivingNews.com.
Tony earned a journalism scholarship and earned numerous awards in history and in manufactured housing. For example, he earned the Lottinville Award in history from the University of Oklahoma, where he studied history and business management. He’s a managing member of LifeStyle Factory Homes, LLC, the parent company to MHProNews, and MHLivingNews.com. This article reflects the LLC’s and/or the writer’s position, and may or may not reflect the views of sponsors or supporters.
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