Real Wages Fell 0.5% as Mortgage Payments Rose $234 a Month

By Grace Kim

U.S. real average hourly earnings for private workers fell about 0.5% in the year to September 2026, reaching a preliminary $11.26, as the 30-year fixed mortgage rate rose to 7.18% by Nov. 5.

That combination sets a difficult test for the housing pitch on The Ramsey Show: buyers are being asked to rely on future wage growth to absorb a mortgage payment that has already become more expensive.

What did the housing pitch claim?

On the Nov. 6 episode, real estate coach Brian Buffini, whom Dave Ramsey introduced as founder of Buffini & Co, told prospective buyers real wages had risen 3.5% that year while prices had risen nine tenths of 1%.

Buffini projected: “The projection for next year is real wages are going up almost four and a half and prices are going to stay flat or might come down 1%, 1%, not 20%.”

He added: “So what’s happening is you’re going to have 10% more affordability within the next three years.” The claim rested on real wages rising by about double digits and prices staying flat over two to three years.

Neither the 3.5% wage gain nor the 0.9% price rise matches the latest national data. The Consumer Price Index rose about 4% over the year, while the national Case-Shiller home-price index rose 2% from a year earlier in August.

Takeaway: The pitch needs future pay growth, but the latest national data show buying power slipping.

What do the pay data show?

The Bureau of Labor Statistics’ preliminary real average hourly earnings for private workers stood at $11.26 in September 2026, down from $11.32 a year earlier. That is a decline of roughly 0.5%.

The same comparison includes nominal hourly pay, up from $36.70 to $37.81 over the year, or about 3%. Because inflation ran at roughly 4%, prices outpaced nominal pay. For an individual worker, a 3% increase did not preserve purchasing power; the worker could buy slightly less.

No sample sizes are specified for the BLS, Consumer Price Index, Case-Shiller or Freddie Mac series. The only revision detail is that the BLS earnings reading is preliminary.

Takeaway: For one worker, a 3% raise did not beat 4% inflation, so buying power fell.

What did higher rates do to a mortgage?

Freddie Mac’s 30-year fixed average reached 7.18% on Nov. 5, compared with 6.17% a year earlier. On a $350,000 loan with a 30-year term, principal and interest rose to $2,371 a month from $2,137. The difference was $234 a month, or $2,810 a year.

A household earning $80,000 and receiving the average 3% bump would collect about $2,420 more before taxes. The rise in the mortgage payment alone consumed more than the whole raise.

A buyer who stretches today on Buffini’s promise would hold a fixed payment while counting on raises that the latest data do not show. If those raises fail to materialize, the payment stays put while the household budget loses ground to inflation.

Takeaway: The higher mortgage bill has already eaten more than the average 3% raise.

Can flat home prices change the result?

Buffini’s price forecast has some support. Case-Shiller read 336.7 in August, slightly below July’s 337.3, showing that home prices had leveled rather than continued rising at a runaway pace.

But flat prices help affordability only if real pay also rises. Here, real earnings were down and mortgage rates were up a full point, so an unchanged sticker price still carried a larger monthly cost.

The outcome hinges on the rate path after purchase. If rates return to February’s low of 5.98%, the same $350,000 loan would cost $2,094 a month, providing $277 in monthly relief and making a planned refinance work.

If rates remain near 7.18% or return to October’s 7.40% peak, the assumed refinance does not arrive. The owner carries the $2,371 payment throughout the life of the loan on wages that are losing ground to inflation.

Takeaway: Flat prices help only if mortgage rates fall; otherwise, today’s payment still decides affordability.

What should buyers test before signing?

• Approve at today’s rate. Calculate the payment at 7.18% and confirm it fits current take-home pay. Treat a future refinance as a bonus, not as the condition that makes the purchase work.
• Measure the buyer’s own real raise. Compare the last raise with about 4% inflation. If it fell short, personal buying power declined regardless of the national forecast.
• Stress-test the payment. Recalculate at October’s 7.40% peak. If that payment strains the budget, the house is too expensive at current rates.
• Track the monthly BLS release. The agency publishes real average hourly earnings alongside the CPI. Two or three rising readings would be the first evidence that the 10% affordability forecast is taking hold.

Takeaway: The next two or three BLS releases, paired with Freddie Mac’s rate readings, will show whether the promised 10% gain is taking hold; until then, today’s payment should set the limit.