Dave Ramsey Says Selling Your Home and Renting Is a Mistake, But Only If You're in This Group

Plenty of retirees reach a point where the house feels like more than they want to manage. Selling it, renting something smaller, and moving closer to family sounds like the simple version of the next chapter for their retirement plan.

Dave Ramsey pushed back on exactly that plan recently. A 68-year-old caller named Steve told The Ramsey Show he'd planned to sell and buy again, then started wondering whether renting would make retirement easier. Ramsey's answer was no, and his reasoning came down to what happens to housing costs over 25 years.

Here's who that warning is aimed at, and where it holds up.

What Ramsey actually argued

Before answering, Ramsey asked Steve three things: his age, his health, and how long he expected to live. Steve said 68 and in pretty good health. That framing matters, because Ramsey's whole case rests on time.

His point was that a paid-off house has a small number of costs that rise, mainly insurance and property taxes. Rent is different. "If you're a renter, 100% of the rent goes up." He asked Steve to picture what his rent would look like in 25 years, and said that's the kind of thing that wrecks a retirement budget.

His preferred alternative wasn't staying put. It was downsizing and buying smaller with cash near family, which gets Steve the move he wanted without the rent exposure.

The group this is aimed at

Ramsey's warning fits a specific retiree: healthy, expecting a long retirement, holding significant equity in a paid-off or nearly paid-off home, and able to buy the next place in cash.

For that person, the trade is real. Selling and renting converts a cost that rises slowly into one that rises with the market, for as long as they live.

Where the math gets fuzzy

The picture changes if you'd need financing. Freddie Mac's weekly survey put the 30-year fixed rate at 6.71% as of September 3, 2026, up from 6.66% the week before. A retiree who can't pay cash is comparing rent against a mortgage at that rate, not against a paid-off house.

Prices matter too. NAR put the median existing-home price at $434,100 in July 2026, up 2.0% from a year earlier. A smaller home in a desirable retirement market may not be cheap just because it has fewer bedrooms.

What selling actually nets you

Ramsey's version assumes the sale proceeds roll into the next house. Several things come out first: agent commissions, repairs, staging, transfer taxes, title fees, moving costs.

On taxes, most retirees clear this hurdle. The home sale exclusion lets qualifying single filers exclude up to $250,000 of gain and married couples filing jointly up to $500,000, provided they meet the ownership and use tests. It becomes a live issue if the gain runs past that or state taxes apply.

When renting still wins

Ramsey's argument weakens in a few situations he didn't address.

If you're moving to an unfamiliar area, renting for a year before committing is standard planning advice, and it avoids buying into a neighborhood that turns out not to fit.

If your health picture is less certain than Steve's, a 25-year rent projection is the wrong frame. Someone likely to need assisted living within a decade is solving a different problem.

And if maintenance is the actual burden, renting removes it in a way that buying a smaller house only partly does.

How to run your own numbers

Compare total cost against total cost, not rent against a mortgage payment. On the owning side that means insurance, property taxes, utilities, maintenance, and repairs. On the renting side, current rent plus a realistic annual increase over the years you expect to be there.

Then check what the sale actually nets after selling costs, and whether that covers the next place with a cushion left over.

Bottom line

Ramsey is right that rent compounds in a way a paid-off house doesn't, and for a healthy 68-year-old with equity and decades ahead, that's a serious argument.

It's a narrower argument than it sounds. It assumes you can buy in cash, know where you want to settle, and have the health to support a long-term commitment. Overlooking any of those factors could lead to costly financial mistakes, making the case for renting much stronger.

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