GO
Loading...

Resist home-buying pressure, Suze Orman advises

The recent rise in housing prices and the decrease in supply in certain parts of the country have some people willing to spend every nickel they have to get into the market now.

But Suze Orman warns hopeful homebuyers not to be hasty and end up house poor.

On Saturday's episode of "The Suze Orman Show," Jean of California asked Orman if it would be wise to tap her savings and retirement to put down 50 percent on a townhouse to ensure that she gets approved despite her income situation. Jean, 43, is going through a divorce and working at a temporary job but insists on buying a home now.

"The reason I must buy now is I found this fabulous location. It's a new build in Southern California, and … right now in Southern California there's no inventory," she told Orman.

To add to the sense of urgency, home values rose 12.2 percent in the second quarter from compared with the same period last year, according to the National Association of Realtors.

Even with such growth, though, Orman advised caution.

"I'm asking you to slow down," she said. "There will be other opportunities. This will not be the last time that you're able to buy something.

"Do not touch the money in your retirement account," Orman added. "You're going to be retired before you know it."

Daniel Acker | Bloomberg | Getty Images

She also warned against cashing out other investments to buy a home hastily.

"The other money that you have needs to start growing as well … not just in real estate but in investments, so you have some diversification," Orman said.

See what else Suze Orman has to say every Saturday at 9 p.m. ET on CNBC.

See more of "The Suze Orman Show"

—By CNBC's Sakina Spruell. Follow her on Twitter @SakinaCNBC.

Featured

Contact The Suze Orman Show

  • Showtimes

    United States
    Saturday 5a | 9p | 12a ET
    Sunday 4a | 5a ET
    Asia (SIN/HK)
    Saturdays 07:00, 11:00, 16:00
    Sundays 01:00, 05:00, 11:00, 16:00
    Australia (SYD)
    Saturdays 09:00, 16:00, 23:00
    Sundays 05:00, 11:00, 16:00, 23:00
    Mondays 05:00
    New Zealand (NZ)
    Saturdays 11:00, 18:00
    Sundays 01:00, 07:00, 13:00, 18:00
    Mondays 01:00, 07:00
  • Host of "The Suze Orman Show," Orman is a two-time Emmy Award-winning television host and an expert on personal finance.

Suze Says