If "house poor" is someone who spends too much on home ownership... (bankrupt, expenses)

[MrRational]

Originally Posted by freemkt

If the cheapest housing you can find costs $N and your income is $1.5N,
did you really overspend on housing?

You continue to approach the equation incorrectly.

Did you have a better alternative?

Of course.
But pretty much any post that anyone has made in response to you will suffice.

[MDrenter223]

Originally Posted by lieqiang

Indeed. It makes no sense for a low wage worker with easily transportable job skills to live in a high COL area for years and years.

No it won't. See above.

Low wage?

I don’t think it’s limited to low wage.

There’s no point in anyone paying a high percentage of their income for rent if they can work elsewhere.

[MDrenter223]

Originally Posted by freemkt

If the cheapest housing you can find costs $N and your income is $1.5N, did you really overspend on housing? Did you have a better alternative?

Yes.

Move.

Jobs exist everywhere.

Case in point the cheapest I can rent for is N, and I make 2N (well I net 2N after taxes, health insurance. 401(k) etc).

So I’m moving.

I’ll get paid a bit less, but housing costs drop 50%, so I’ll make closer to 4N.

4N is nice.

[LieslMet]

Originally Posted by PriscillaVanilla

I've noticed people who buy bigger homes than what they can truly afford, didn't consider the higher property taxes, higher utility bills (heating and cooling) that come with a large home. A friend of mine bought a McMansion to impress her friends and boasted about how big her home was, a few month later, in the summer, she was in shock about her air conditioning bill, it was over a thousand dollars. I was thinking, are you really that dumb? You live in a big house. Of course it's going to cost more money to cool and heat more square feet. Duh. I have zero sympathy for these people. They choose to live beyond their means to impress other people, so they can deal with the consequences.

Yes. Our current home is around 2000 sq. ft. Plenty. Larger homes of the same build period (150-200 years old) cost FAR more because they were built to be actual mansions but their taxes are kept low on purpose so people can afford the upkeep. Beautiful homes.

Some of our children's *rude* acquaintances have asked why we don't live in a bigger house. Well, we can't afford a mansion but we can afford the sale price of these children's homes... they're new or built in the last 50 years. The tax situation is NOT the same, however. The taxes on a house only $40K more than ours (and only 200-500sq.ft. of inefficient space larger) have 4 times the taxes. The taxes alone are WELL OVER what the entire mortgage payment, including everything, would be on our home. And the costs to heat and cool them are astronomical... our old homes were built with thrift in mind. There's a reason why there are doors everywhere and at the bottoms of stairs, more windows on certain sides of the house than others, and overhangs built as they were. The kitchen was strategically placed. The bathrooms were set up a certain way to make access easy. There's no basement because there are springs in these hills and the new homes have basements because people want basements, then they have to keep replacing and maintaining sump pumps and paying for extensive cleanups because they flood anyway and destroy all of their stuff.

Sorry, not sorry. No jealousy, here. Their parents both HAVE to work to afford all this and tell me how lucky I've been to be able to stay at home for the majority of their childhood. Yeah... it wasn't luck, just different choices.

[CGab]

Originally Posted by gentlearts

They are also house poor.

+1


There no other term that I'm aware of. If you spend more than is financially feasible on "any type" of housing than you are considered house poor. I don't think the term is limited to just home ownership.

[CGab]

Originally Posted by freemkt

Then rents should necessarily plummet, right?

Opposite! If the housing market crashes again as it did 2008-2011 rents would increase, as people would foreclose on their homes and need to rent making it a supply and demand situation!

[freemkt]

Originally Posted by CGab

Opposite! If the housing market crashes again as it did 2008-2011 rents would increase, as people would foreclose on their homes and need to rent making it a supply and demand situation!

Then the housing market shouldn't crash because there will ALWAYS be demand and at some point in the decline of home prices, light bulbs will turn on in people's heads and they will say...

WHY AM I PAYING AN ARM AND LEG TO RENT WHEN HOMES ARE NOW SO CHEAP TO PURCHASE??? I do not see ownership as an automatic ticket to wealth, I see ownership as a crucial hedge against inevitable rent inflation.

[mathjak107]

in nyc and the boroughs we saw rents not only come down in 2008 and through those early years of the great recession but we saw incentives to rent like we never saw before . get 13 months for the price of 12 months as an example

[mathjak107]

Originally Posted by freemkt

Then the housing market shouldn't crash because there will ALWAYS be demand and at some point in the decline of home prices, light bulbs will turn on in people's heads and they will say...

WHY AM I PAYING AN ARM AND LEG TO RENT WHEN HOMES ARE NOW SO CHEAP TO PURCHASE??? I do not see ownership as an automatic ticket to wealth, I see ownership as a crucial hedge against inevitable rent inflation.

homes don't decline in a vacuum . jobs and pay cuts usually go along with that drop in real estate values .

[jerseygal4u]

I always thought it meant someone who bought a house but cannot afford to furnish it.