Do NOT Buy A House! (Warren Buffett’s Final Warning)

Are you thinking about buying a home right now? You may have seen videos that say “Do NOT Buy A House! (Warren Buffett’s Final Warning).” That sounds scary. But what does it really mean? In this plain-English guide, we explain the warning, the facts, and the math in a way that is easy to follow.

We use short sentences and simple words. We also name our sources. Our goal is to help you make a smart choice for your life and money. We also include a local call-to-action at the end for Enigma Properties in Milwaukee and Green Bay if you decide renting fits you better right now.

Why people say “Do NOT Buy A House!”

The phrase is bold. It gets attention. But it is not a rule for everyone. The point is this: be careful. Think about costs, time, and risk before you buy.

Some recent talks and videos say that Warren Buffett does not see real estate as a great deal right now. He has said stocks are often easier than real estate. He also says big bargains in housing do not show up as often as big bargains in the stock market. That is because houses take time to buy and sell. Stocks can be bought or sold in seconds.

This is the heart of the “final warning.” It is not “never buy.” It is “do not rush.” Run the numbers. Know your plan. Make sure the deal fits your real life.

What Warren Buffett’s view means in simple words

• Stocks are easier. You can buy or sell fast. It takes seconds.
• Houses take work. You must find a place, make offers, do inspections, close, fix things, and manage. It takes hours and days.
• Big bargains are rare in housing. They do happen, but not as often as in stocks during big market drops.
• Debt is a key risk. Cheap loans made housing deals great in the past. When loans cost more, the math is harder.

This is not a put-down of real estate. It is a reminder: housing is not “set it and forget it.” It is hands-on.

What the long-term numbers say (with sources)

We keep this simple and honest:

• Stocks: Over the long run, U.S. stocks returned about 9–10% a year on average, with dividends reinvested (NYU Stern/Aswath Damodaran long-run market data).
• Home prices: Over very long periods, home prices mostly rise with inflation. Economist Robert Shiller found that real (inflation-adjusted) U.S. home price gains have been small on average over more than a century (Shiller home price data).
• Mortgage rates: In the early 2020s, many buyers could lock ~3% fixed rates. In later years, typical 30-year rates moved much higher, which raises monthly payments (Freddie Mac Primary Mortgage Market Survey data illustrate the shift in rates across recent years).

What that means: Stocks may grow faster on average over long time frames. A home’s price may not outpace inflation by much. But a home can still be a great place to live, and, when bought right, can be a solid long-term plan.

The payment shock: a simple example

Let’s look at how the mortgage rate can change your monthly payment. This is only an example to show the impact of rates.

• Home price: $400,000
• Down payment (20%): $80,000
• Loan: $320,000
• 30-year fixed loan

At 3%, the monthly principal + interest is about $1,350.
At 7%, the monthly principal + interest is about $2,130.

That is a difference of about $780 per month for the same home, just because the loan’s rate is higher. This is why the warning says to be careful. The payment must fit your budget today, and tomorrow.

“Do NOT Buy A House!” — when this warning may fit you

There are times when renting or waiting is the safer move. The warning may fit you if:

1. You plan to move soon. If you need to move in 1–3 years, closing costs and fees may wipe out gains.
2. Your budget is tight. If your payment would be more than you can safely handle, wait.
3. You have no cash cushion. Homes have surprise costs. Without savings, one repair can hurt.
4. Your job is not stable. If income could drop soon, a fixed high payment is risky.
5. Local rents are much lower than buy costs. If renting the same kind of home is much cheaper, renting can be wiser right now.
6. Insurance or taxes are spiking. Some areas are seeing higher insurance or property taxes. Factor these in.
7. You need flexibility. If you plan life changes soon, renting gives you freedom.

In these cases, do not buy a house right now. Keep cash. Keep your plan flexible. Re-check in 6–12 months.

When buying a house can still make sense

On the other hand, buying can be smart if:

1. You plan to stay 7–10+ years. Time helps. It spreads closing costs and softens market swings.
2. The payment fits a stress test. Can you handle the payment plus taxes, insurance, and repairs and still save each month?
3. You have a cash cushion. Set aside money for surprise repairs. A good rule is to save 1–2% of home value per year for upkeep.
4. You value control. You can paint, remodel, and make the space yours.
5. Local rent is close to or above your buy cost. In some areas, buying can be close to the same monthly cost as renting.
6. You lock a fair fixed rate. A fixed rate can protect you from future payment jumps.
7. You buy a home that fits your real life. Not too big. Not too far. Less stress.

Buying is not only about returns. A home is also shelter. It is your place. That has value beyond money.

Stocks vs. housing: what Buffett wants you to see

• Time: Stocks take minutes. Real estate takes days, weeks, and sometimes months.
• Liquidity: You can sell a stock quickly. You cannot sell a house quickly without cost.
• Bargains: Big stock drops can create fast bargains. In housing, big bargains are rarer and slower.
• Hands-on: Housing needs ongoing time for maintenance. Stocks do not.
• Debt: Housing often uses large loans. This helps when rates are low. It hurts when rates are high.

This is why the warning says to think hard now. If rates are high and your budget is tight, the numbers can break fast.

Common myths you should not follow

Myth 1: “Rent is throwing money away.”
Rent buys you shelter and flexibility. It is not waste. You may also invest the money you do not spend on repairs or closing costs.

Myth 2: “A house always goes up.”
Not always. Some years prices fall. Over long periods, prices mostly follow inflation (Shiller data).

Myth 3: “If the bank approves me, I can afford it.”
Lenders do not live your life. Only you know your full costs and goals. Use your own budget test.

Myth 4: “I must buy now or I will be priced out forever.”
Markets move in cycles. Prices can change. Your income can grow. Patience is a plan, not a failure.

Smart steps before you buy (simple checklist)

1. Know your “all-in” payment. Add principal, interest, taxes, insurance, HOA, and a repair budget.
2. Save a cushion. Aim for 3–6 months of living costs, plus a repair fund.
3. Compare rent vs. buy honestly. Look at similar homes, not bigger or fancier ones.
4. Stress-test your plan. Could you still pay if your income drops 10%?
5. Check commute and lifestyle. A cheaper home far away can cost more in time and gas.
6. Price the little things. Movers, blinds, paint, locks, yard tools, and more add up.
7. Read the inspection. Fix the major risks first.
8. Lock your rate at the right time. Ask your lender how long a lock lasts and what it costs.
9. Keep your credit clean. No big new debts during underwriting.
10. Sleep on every choice. If a deal feels rushed, it may not be right.

The long-view: where returns really come from

• Stocks: On average, about 9–10% per year with dividends reinvested over long periods (NYU Stern). This is not a promise. Stocks can fall hard. But time helps.
• Housing: Long-run real gains are small (Shiller). You build wealth mainly by paying down debt, by owning the utility (you live there), and by avoiding rent increases over time.
• Loans: Low rates can make real estate shine. High rates make it harder. That is why the same house can be easy to buy one year and very hard the next.

Buffett’s warning is about timing and ease. When loans are expensive and prices are high, it is harder to win big with housing. That is the point.

Risks to factor in before you buy

• Property taxes: These vary by state and county. In some places, they are high. Tax Foundation data show states with higher effective rates around 1%–2%+.
• Insurance: Storms, floods, and fires can raise premiums in some areas. Ask for a quote early.
• Maintenance: Roofs, furnaces, water heaters, and windows wear out. Budget 1–2% of home value per year for repairs and upkeep.
• HOA dues and special assessments: If there is an HOA or condo board, ask for the financials and recent meeting notes.
• Liquidity risk: If you must sell fast, you may get a lower price and still pay fees.

f you understand and accept these risks, buying can still be right for you.

When “Do NOT Buy A House!” can save you

• You almost emptied your savings for the down payment.
• Your all-in monthly payment would stop you from saving or investing.
• You would feel stuck if your job or family needs change.
• Your gut says the deal is too tight.

In these cases, renting is a smart plan. You can keep cash, cut risk, and invest the difference in a broad, low-cost stock fund if that fits your goals. Many people do this and sleep better at night.

When buying can still feel great

• You found a modest home that fits your life, not your ego.
• Your payment leaves room to save and invest every month.
• You plan to stay long enough to spread costs (7–10+ years).
• You want control over the space and will use it.
• You are okay being a “home manager” and fixing small things.

If that is you, then buying can be a happy and stable choice.

Key sources you can read later

• Stocks (long-run returns): NYU Stern School of Business — historical returns with dividends.
• Home prices (long-run trend): Robert Shiller home price data and research on real (inflation-adjusted) returns.
• Mortgage rate context: Freddie Mac Primary Mortgage Market Survey shows how average 30-year fixed rates changed over time.
• Property taxes (state comparisons): Tax Foundation reports on effective property tax rates.
• Risk and weather: Ready.gov and state emergency sites show local hazards and how to prepare.

We use these kinds of sources so your plan is based on data, not just a headline.

Bottom line on “Do NOT Buy A House!” (Warren Buffett’s Final Warning)

The message is not “never buy.” The message is “do not buy in a rush.”

• Run the math.
• Check your life plans.
• Think about time, cash, and risk.
• Compare rent vs. buy with honest numbers.
• Only move forward when the deal fits you.

If the numbers do not work, renting is okay. It is not throwing money away. It buys shelter, time, and flexibility. You can keep building wealth in other ways while you wait for a better fit.

Renting in Milwaukee or Green Bay? Enigma Properties can help

If you decide not to buy now, or you want to test a city first, Enigma Properties is ready to help. We are a local property management company in Milwaukee, Wisconsin. We have rentals across Milwaukee, Green Bay, and nearby areas. We listen to what you need and match you with the right place.

Want a simple studio near work?

Need a family-friendly home near parks and schools?

Looking for a quiet spot with easy parking?

Contact Enigma Properties for more info and current availability. We will share clear options, answer your questions, and guide you step by step. No pressure. Just honest help so you can make a smart move.