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What Is Suze Orman Talking About?

Our founder, Steve Harney, occasionally asks to do a personal post on what he sees as important to our industry. Today is one of those days. Enjoy! – The KCM Crew

I have great respect for Suze Orman. She has dedicated her life to educating consumers on financial matters and has built a sensational personal brand along the way. I don’t always agree with her advice but can always see the logic in her position. However, she said something last Friday evening that was absolutely wrong.

Ms. Orman appeared on HBO’s Real Time with Bill Maher and addressed the housing market in this country. Her comment:

“We now have an America that doesn’t even think that they want to own a home anymore; they’re under water in their homes, and they are praying that somebody will just take it off of their hands so that they can rent.”

Her statement shocked me. I realize that there are many individual cases that are nothing less than tragic. I understand that there are some families trapped in a house they cannot sell. To say that Americans no longer believe in homeownership, however, is just not true. If you go to Orman’s own site and search the words ‘home ownership’, it sends you to FannieMae’s website for information.

What makes this ironic is that, on FannieMae’s website, you can find the National Housing Survey which is done quarterly. This survey asks Americans how they feel about housing. Here are a couple of findings from the most recent survey:

  • 96% of all homeowners (and even 93% of all homeowners that are currently underwater) believe that homeownership has been a positive experience.
  • 84% of Americans and 70% of renters believe homeownership is a better alternative than renting.
  • 63% of renters have aspirations to someday be a homeowner.
  • 64% of Americans think buying a home is a safe investment. (A safer investment than stocks or government bonds)
  • When asked which investment is currently showing the most potential, more Americans picked buying a home than ANY OTHER INVESTMENT (stocks, bonds, mutual funds, etc.)
  • Broken down – 67% of homeowners, 55% of renters and even 75% of those homeowners underwater believe it is a good time to buy a home.

Bottom Line

Suze Orman may believe that families in this country now prefer renting over owning. Surveys say the exact opposite. Americans still very much believe in owning their own home.

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23 replies
  1. Amanda Wilson
    Amanda Wilson says:

    She was also on Piers Morgan and generally said about the same…she even said that renting may be what you want to do forever…as you may never want to buy…Glad you posted this!  Good work Steve!!  Looking forward to seeing you in Miami this week!

  2. Jmccall415
    Jmccall415 says:

    Suze Orman is a great repackager and showman of common sense financial information.  Often she strays when she speaks from her own conclusions and not researched information.

  3. Reepublisher
    Reepublisher says:

    Alot of beliefs and thinks in these statements. Fact remains that if you run the numbers, factoring in real estate taxes, interest, upkeep, apprciation annualized at 3%, renting is a more profitable experience. Unless you use stratgegic equity methods to create wealth. Which we know the avergae homeowner can’t and won’t mamage. Nor does the average realator understand. Trust me I know. I’ve attempted to explain these concepts for years and they fell on deaf and dumb ears. Read Ric Edeleman The nations leading fincial planner can explain it if you care to research. 
    Lets’ keep to the facts home ownership is about security, and self satisfaction; period not about the wisest finacial strategy. And there is nothing wrong with that.
    Just want to be clear we are not confusing the two.

  4. Shantee Haynes
    Shantee Haynes says:

    Interesting enough, I saw her on “Extra” a bout a month ago giving her OPINION (in which she didn’t preface that it was merely her opinion) that housing won’t recover util 2023! Now it has been a few years since I have watched her show, and I don’t doubt she’s talking from something solid, but to have made that statement on a show that has NOTHING to do with housing/financial, and is on a platform of NATIONAL television where people from various markets are watching (some performing better than others) was just irresponsible…

  5. Ruthmarie Hicks
    Ruthmarie Hicks says:

    I was surprised at this too.  However, she is right about one thing. Real estate has to come back for the economy to thrive. 

    Don’t forget that people do go to her for advice when they are in trouble – so her view is probably skewed towards the worst case scenario that she sees a disproportionate amount of…I’m not that big a fan of hers – I think she often misses the target advice wise.  For example, in many markets people should be grabbing onto the bargains out there with both arms.  Comments like that hold back a substantive recovery.  

  6. Barbara Hensley
    Barbara Hensley says:

    Shame on Suzie!  Like so many of the television “experts” she does not always talk from a real world view point.  Home ownership is not ALL about the best investment.  

  7. Chris Kingham
    Chris Kingham says:

    1. How do the millions of homeowners who have been evicted and therefore are not part of the 96% homeowner figures actually think about their home owning experience?  2. Do the 93% of the quoted underwater homeowners who are still making their payments on a deprecating asset still feel that home owning is a positive experience? Many of them have so much equity invested they can’t get out even if they want to.  3. The real bottom line is there are millions of ex home owners whose dream turned into a nightmare. Include them in the survey and the figures would be very different and the so home owning experience would not be seen in such a positive light.

  8. Ryan
    Ryan says:

    Not sure what kind of numbers you would expect Fannie and Freddie to put out. To me the biggest problem is lack of confidence in the market (or lack thereof). NAR has been painting a rosy picture of years and the market keeps tanking. The gov. has jumped in as the savior with all their bailouts only to muddy the waters and prolong the inevitable, the fed and treasury are keeping interest rates artificially low.  
    Bottom line – no one – not even us professionals – know where the market is going. Everyone needs to get out of the way and let true market forces take over.   If people are confident they know which way the market is going (up or down) they can make well thought out decisions.   Today real estate is a crap shoot. 

  9. David Mott
    David Mott says:

    Back around Y2K, Suze Orman repeated the mantra that stocks were a long term investment. After the market crashed, one comment she made to a caller that was complaining about losing money in the stock market was “well, you should have taken some money off the table”. I will always remember that…

    The fact that many people are “underwater” on their mortgage may have something to do with the same folks refinancing market equity out of their property to buy something else or send someone to college. What percentage of the underwater mortgages do these folks represent?

    If I had never owned a home, I would now not be living rent free.

    I see quite a bit of gross generalization with the numbers in the media, ‘for peeps sake’.

  10. Diallo Stevens
    Diallo Stevens says:

    I think we may be missing what she really intended to say, which I take two-fold.  1st, I think she was speaking to the reality that many people these days are still very afraid and are trying to get out of the real estate market because they got (or more accurately are being) burned.  This psychology, I agree, is not as ubiquitous as she may have made it seem; but, it is intense.  2nd, I think she may have been conflating with the first point the government’s leaning toward a rental nation policies/outlook. Encouraging a rental nation, in my opinion, flies in the face of reality and reason.

    So, while I don’t always agree with Suze Orman, I’m giving her the benefit of the doubt on this one.

  11. Kevin Kent
    Kevin Kent says:

    I disagree with what she said; however, what she should have said is that many more Americans ought to consider renting rather than buying. Take the Bible for what it is–at the very least some pretty good wisdom and commentary on the human experience. The Bible says that you are a slave to your lender, and that’s the Lord’s truth. I’ve seen a lot of people financially crushed by their mortgage the last few years, including family members. I’ve seen a marriage teeter on the bring of destruction due to housing related issues.

    Having a mortgage payment changes everything–it makes you a slave to your job, your geography, and to your lender. There are a lot of benefits to homeownership, but it’s truly not for everyone. And the one thing I really hate about some Realtors and the National Association of Realtors is how they hawk this product–that it’s always the right time to buy for everyone and anyone, their circumstances be damned. My job depends on people buying houses, but I never sell people a bill of goods. I’d rather be proud of the person in the mirror every morning than have a nicer car.

  12. Keith &Kinsey Schulz
    Keith &Kinsey Schulz says:

    I’d be curious of Suze’s real life real estate experience. Is her home underwater, because she does seem extremely bitter about the housing market. I couple months ago she suggested strategic default to someone who could easily pay their mortgage (like that’s going to help the market). She also made a comment that it was going to take 14 years to recover to pre market crash prices (which is also a crazy statement). I wrote a blog debating these things too. She needs to step out of the negativity and realize that housing is a great buy right now!

  13. Dan Schwellenbach
    Dan Schwellenbach says:

    Suze Orman does not even hold a single designation for financial planning yet she is seen as an “expert” in the field of financial planning in the eyes of the public.  I think she should go on the same talk show with Ric Edelman or some other financial planner so she can be exposed for the lack of knowledge she really has.

  14. Jolie Powell
    Jolie Powell says:

    Thank you for clarifying this to the world, Steve!  I, too, was shocked when I heard Suze comment on the housing market.  Homeownership is a tradition we must preserve!

  15. Adam
    Adam says:

    It is easy to see that this comment was taken well out of context. Of course people believe it is a good time to buy a home. That isn’t at question, houses are cheap. Do they have the money or the means to buy a home? Owning your own home is a positive experience for a lot of reasons, but this doesn’t mean that those who are underwater are not looking for a way out. The many down sides to renting make ownership the way to go. Orman is concerned with how to get there without losing everything else in the process. We live in a time of uncertainly. She is basically stating that most people are fearful about buying a home when they don’t know if they will have a job in a week or a year or in 10 years. I would recommend watching the whole show before taking a single statement out of context. It is about confidence in the market, not how people “feel” about home ownership specifically.


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