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Yup, the vast majority of the housing market is still made up of conventional loans, and even the notorious "sub-primes" that did end up in default, really accounted for only a small share of that market. While many everyday folks (myself included) also took advantage of that "cheap money" to snap up investment properties and ensure our respective financial goals (like for example allowing me to retire early).
In fact I still own several rentals purchased via zero-down, sub-prime adjustable loans, and the monthly checks from the property management company are also still quite useful, thank you very much!
Is this a great country or what? Nothing down and an endless stream of free money.
Are Americans brain-washed into buying more house than they need? It's a decent question. I'm most certainly influenced by the culture of my community, so there's that, but having a big, luxurious house has never been a priority for me. What is important to me is an excellent education for my children. Because I have three of them, there was really no way to do private school and have enough left over to fund our retirement accounts, so that meant a top-rated public school district. We bought what was available and affordable for us in a tight market. The house just happened to have some luxury finishes. Were they on my must-have list? I honestly couldn't have cared less. But back to the idea of buying more than one needs, is it wrong for a couple to think a few years down the road and buy a house with four bedrooms when two bedrooms would do for the moment? I don't think so; I think that's pretty smart. Transaction costs can eat up a huge portion of home equity, so if a couple is planning to stay in place, it might be best to buy with the future in mind.
I wouldn't say brainwashed, but yes, many people live beyond their means. It is a free country.
I can't answer the poll, because I have no idea whether others are living beyond their means. Myself, I have some debt - credit cards and motorcycle loan - but all my bills get paid on time, so I'm not living beyond my means.
Later in life I discovered the greatest measure of freedom came when you own your own home and no debts with the exception of monthly recurring debts.
If I had to do it over again I would opt for the lower grade smaller house, keep it somewhat nice in a safe neighborhood. Helps to bullet proof yourself to recessions and periods of unemployment should they happen because it is amazing how little you can live comfortably on without a debt load.
Agreed.
But I feel the premise of the original question and the direction the conversation has gone in is muddled.
Is the question SPENDING too much for a home (and lifestyle) or is it that we purchase too much square footage per person?
In order to buy a home where I wanted to live, the minimum square footage is in the high 2000s, the average is closer to the high 3000s, and many are in the 5000+ range.
That being said, I could have paid cash for the 2000s homes, but then I wouldn't have had the yard space I wanted...because larger square footage homes here come with bigger lots, as well.
Add to that that the smaller homes tended to have low ceilings, be darker, and were closer to the neighbors...someone who gets claustrophobic like I do would never be happy in one.
I mean, getting what you want doesn't necessarily mean spending too much. And how much room a person needs to feel comfortable varies from person to person.
We have 4600 square feet on half an acre of land. We can well afford it, and now that we have kids, we use every single room because the larger size doesn't mean more rooms - it means each room itself is bigger (master, two kids bedrooms, playroom, gym, study, kitchen, tv room/den, pool table in formal living room...I guess we don't much use our formal dining room, but my son uses the long floor plan to ride his scooter and backhoe loader when the weather is bad or play soccer).
I used to be a big NFL fan. But I just gave up about a dozen years ago. It now takes them four hours to televise 60 minutes of football because they have three hours of commercials for viagra, light beer, pizza and pickups.
If it ever becomes a football league again instead of an advertising agency, I'll rekindle my interest.
Get a DVR. you can watch a complete game in a little over an hour and NO commercials.
I believe it was you who said they tried to open their own business and it failed not because of anything you did but, what the gov't did..
If I am mistaken, I apologize.
"You're free to think whatever you choose, of course. And it's obvious you do"
As you also do.
I just realized that I AM mistaken on you. And I sincerely apoligize.
No sweat.
It's easy to do when we converse via electrons.
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