chefmeg
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Hathery said:I personally just think it's a shame that our income hasn't gone up along with the cost of housing. If they had gone up equally, people wouldn't need to be taking out massive mortgages they can barely afford.
cwinter474 said:Stampaholic - I like how you think!!!!
Stampaholic for President!!!!!!
janetupnorth said:I don't think its an income vs. housing issue. People are getting credit beyond their means.
People are no longer happy with their 2-3 bedroom ranch. They want the 4 bedroom, 2 bath, attached garage, big yard house. Look at SE WI, every old farm field is growing houses and condos instead of corn and cabbage.
People don't look to pay off their mortgages in 15-30 years, they look to see if they can squeak the monthly payment. If they can, who cares about long-term.
It's all about "keeping up" vs. being content with what you have.
When have you seen a 2-3 bedroom single-story house being built in the last 5 years without a garage? Not too many!
janetupnorth said:I don't think its an income vs. housing issue. People are getting credit beyond their means.
People are no longer happy with their 2-3 bedroom ranch. They want the 4 bedroom, 2 bath, attached garage, big yard house. Look at SE WI, every old farm field is growing houses and condos instead of corn and cabbage.
People don't look to pay off their mortgages in 15-30 years, they look to see if they can squeak the monthly payment. If they can, who cares about long-term.
It's all about "keeping up" vs. being content with what you have.
When have you seen a 2-3 bedroom single-story house being built in the last 5 years without a garage? Not too many!
Hathery said:I just don't agree with that.
Average household income in 1957: $5000/yr
Average household income in 2006: $48,000/yr
Average home purchase price in 1957: $2330
Average home purchase price in 2006: $212,800
And that's why families with even TWO wage earners (as wasn't the case in the 50's) can't even afford a home. Where I live, a nice 2-bedroom ranch runs nearly $200,000 a year if it's even remotely modern.
But yes...it's certainly true that lenders are extending credit far beyond the means of many homeowners. But it's not always because they want more than they can afford...their income isn't enough to ALLOW them to afford anything.
Hathery said:I just don't agree with that.
Average household income in 1957: $5000/yr
Average household income in 2006: $48,000/yr
Average home purchase price in 1957: $2330
Average home purchase price in 2006: $212,800
And that's why families with even TWO wage earners (as wasn't the case in the 50's) can't even afford a home. Where I live, a nice 2-bedroom ranch runs nearly $200,000 a year if it's even remotely modern.
But yes...it's certainly true that lenders are extending credit far beyond the means of many homeowners. But it's not always because they want more than they can afford...their income isn't enough to ALLOW them to afford anything.
janetupnorth said:Where are your stats from Hathery? They do not match the US Census Bureau income stats.
janetupnorth said:Forget my question, I found those stats on a blog without sources quoted.
etteluap70PC said:EX: my home is 40 years old and luckily very well kept up. I would considder it an average 2 bedroom rambler with a non finished basement and an attached garage on 1 acre of land. 20 years ago this home sold for arround 45,000, we purchased it 3 years ago just before prices began to drop for $140,000. The reasonable homes are out there you just have to know your limits.
And as others have stated people feel so entitled to have a big home with all the extras. That once the banks say "we will approve you for this much $" they just say yayyyy I can have everything I want!
Would I like a larger home and not be sleeping in my basement so my children could have seperate rooms? Um yeah... would I like more land so I did not worry so much about my pets getting run over by crazy drivers on my busy road? yes! Would I like a modern kitchen with granite countertops? You betcha! But would I get those things and not be able to spend any time with my kids or be able to have them take swimming lessons etc? Heck no!
Hathery said:Again, it seriously depends where you live. What's "reasonable" in one place is not "practical" in another. Back where I grew up in the Fox Cities, you could get a gorgeous home for $89,000 if you wanted. Here where I live now, you can get a mobile home or a saltbox house (if you're lucky.) Granted income is a bit higher here, but not when you have government jobs where the income is the same state-wide. Our money just doesn't go as far here. To say we feel "entitled" to a large home is ridiculous, but we do feel entitled to A home. We live in a 2-bedroom condo, and had to borrow money to meet the downpayment and have a WHEDA loan to help us with the interest rates. We were lucky that way; not everyone is.
Hathery said:I know, I couldn't find the sources either. Do you have the US census stats for average home prices?
janetupnorth said:I don't think its an income vs. housing issue. People are getting credit beyond their means.
People are no longer happy with their 2-3 bedroom ranch. They want the 4 bedroom, 2 bath, attached garage, big yard house. Look at SE WI, every old farm field is growing houses and condos instead of corn and cabbage.
People don't look to pay off their mortgages in 15-30 years, they look to see if they can squeak the monthly payment. If they can, who cares about long-term.
It's all about "keeping up" vs. being content with what you have.
When have you seen a 2-3 bedroom single-story house being built in the last 5 years without a garage? Not too many!
Hathery said:Again, it seriously depends where you live. What's "reasonable" in one place is not "practical" in another. Back where I grew up in the Fox Cities, you could get a gorgeous home for $89,000 if you wanted. Here where I live now, you can get a mobile home or a saltbox house (if you're lucky.) Granted income is a bit higher here, but not when you have government jobs where the income is the same state-wide. Our money just doesn't go as far here. To say we feel "entitled" to a large home is ridiculous, but we do feel entitled to A home. We live in a 2-bedroom condo, and had to borrow money to meet the downpayment and have a WHEDA loan to help us with the interest rates. We were lucky that way; not everyone is.
janetupnorth said:Amy - Kudos for wise decisions and working hard! You guys DESERVE your house/land!
etteluap70PC said:Yes definetly!
You are part of the 95% of people who do things the right way.
I have NO issues with anything you posted.
amy07 said:I agree with your comments. And seeing how this is the first time that I have posted on any of the "heated" threads, please be kind and patient with me!
However, my family and I do live in one of those 4 BR, 2.5 BA homes with a HUGE yard (5 acres to be exact, mostly wooded) BUT this is how we differ from many of the "Jones'":
When DH & I married, he owned (or should I say, had a mortgage) a home and so did I. We then sold my home at a nice profit and paid off a car loan (mine).
We then invested the remaining $$, anticipating a new home for a growing family. We bought land and put a VERY NICE earnest money deposit down with a builder for a home of our choice to stay in for the next 30+ years! Was it going to be bigger than we needed at the time (and even now). Yes! But, we also knew that as our children grew (3 now) that we would eventually probably have them around even after their college years (seems it takes longer nowadays to get and KEEP them out of the nest). And 5 grown people (or even teenaged) in one house can probably seem kind of cramped.
So, between putting a contact to build on a new home and selling our existing house the market turned to a seller's market BIG TIME! But here's the kicker, our existing home did NOT close prior to closing on the new one! Thankfully, because we SAVED THE MONEY from the sale of my home we could close on the new one.
Now, this is what has ALWAYS bothered my DH: what if our existing home had NEVER closed?!?! Our bank was still going to/AND DID give us the NEW mortgage! Even with the other mortgage not paid off!! Why? Because we had good credit! Does that mean that we could've afforded BOTH mortagages? Heck no! Now, granted in the bank's perspective we DID have a contract on the house. But whose to say that it didn't fall thru? It was a risk that DH & I took as well. (we did have enough in savings to carry us for awhile if we did have to make 2 mortgages.) Keep in mind that during this time period, houses often had contracts on them before they ever "officially" hit the MLS. That's how HOT the market was.
Shortly after closing on our OLD house we decided to refinance our "new" mortgage. Why? Because we wanted to put the profit $$ down to lower our payment to one we were comfortable with.
So, what's my point? We actually owe less on our 4 BR, 2.5 BA 3-story than our 3BR/1.5 BA rambler. Why? Because we didn't refinance to cover debt/ acquire more than we could afford. Even in today's lousy housing market our home would not be sold at a "loss".
The flip side is that we could've EASILY spent the $$ from the sale of our house instead, and "kept up with the Jones'". It would've been very easy to say "but the Bank says we can afford the payment". But we made a choice! Had we decided to get new furniture/cars, would the bank have bailed us out for making wrong decisions?
This whole mess makes Suze Orman's words ring louder and louder in my ear: YOU DO NOT FIX MONEY PROBLEMS WITH MONEY!!
same can be said for credit.
Hathery said:You're very lucky to have come into that financial situation. If I had to save up or whatever to buy a home, I wouldn't buy a home til I'm retired (if I'm lucky.)
Some people were definitely greedy with their want, want, want of a home out of their league, but I really don't think that was the case with most people. Most people were just hoping to live the American dream of owning a home (when in reality that dream has really been obliterated and that lifestyle is well outside of most Americans' grasps.) Greedy lenders did take advantage of these people and give them false hope that they could live this lifestyle, and did offer them mortgages that they knew the borrowers could never pay back. I don't think it's fair to assume that all these borrowers were just being greedy though...many just wanted to offer a good life for their familes and themselves. It's sad really. I just pray nothing happens to me or my husband, or we'll be in that boat too, with people calling us "greedy" for having wanted to purchase a home and no longer being able to afford it.
ltkacz said:Amy07 - Where in the world were their common sense?!
mrssyvo said:We moved into our weekend home last March, and put our previous home on the market. There have been no offers, due to the economy, and this mess, and our realtor just keeps wanting us to lower our price (we have already reduced it $50,000 since March. We have decided to take it off the market until things improve, and rent it out to my brother. I feel really bad for those who do not have that option.
Belle4562 said:But it is your responsibility to educate yourself on how loans work before you sign on the dotted line.
JAE said:Nobody is entitled to owning a home. Nobody.
Hathery said:Yep, it sure is. But some people didn't and were taken advantage of. It might have been stupidity, but it wasn't greed that put them where they are.
Hathery said:Explain, please.
janetupnorth said:Please also explain your comment of thinking everyone has the right to own a home. I think that is what JAE is commenting on.
I am not entitled to a home, car, whatever, I must work and pay for it. Sometimes the work to get it is a bigger stretch for me than someone else. But I have the right to move if I want to where it is easier not make the government rules comply to my situation to give it to me...
That is the difference between you and some of us who don't back Obama. I don't believe it should be the government's responsibility to ensure housing is affordable, either. The government should ensure that people obey laws and they should protect us from those who don't obey laws. If the people involved in this money mess broke laws the government should punish them.Hathery said:I do believe everyone is entitled to shelter, and it should be the government's responsibility to ensure it is affordable for its people. That's what I mean by everyone has the right to own a home (or rent an apartment for that matter.)
Yes, people have the right to move, but it's not economically viable to just pick up and move somewhere else. It takes a lot of money to move, unless you plan to live on the street...
Liquid Sky said:It means we are on shaky grounds. DO NOT CHARGE ANYTHING! If you can't afford it buy buying it with cash....don't charge it. Most likely, interest rates will increase, credit card companies will start slashing your available credit limits. We are just too much of a risk right now.
Loans will start to be nearly impossible to get...due to risk. Watch your budget, live within your means, and ride it out. That's about it in a nutshell.
Belle4562 said:But it is your responsibility to educate yourself on how loans work before you sign on the dotted line.
JAE said:That is the difference between you and some of us who don't back Obama. I don't believe it should be the government's responsibility to ensure housing is affordable, either. The government should ensure that people obey laws and they should protect us from those who don't obey laws. If the people involved in this money mess broke laws the government should punish them.
Hathery said:You're very lucky to have come into that financial situation. If I had to save up or whatever to buy a home, I wouldn't buy a home til I'm retired (if I'm lucky.)
"With your personal story, you're very lucky it was a seller's market. Had you tried to do this today, you'd probably have sold your house for less than you paid (if you sold it at all.) You invested and it paid off...many people have invested in real estate and seen their investment go down the toilet. Doesn't mean they don't "deserve" a nice house because they invested at the wrong time."
amy07 said:I'm curious as to why you say my family and I are lucky? Luck had nothing to do with it. Both my DH & I both worked very hard to save/buy our first homes, individually. There was no luck involved, unless searching and waiting for a house that was affordable to our individual budgets is getting lucky. We made HUGE sacrifices that many of our comtemporary friends could/would not make. Examples: We each drove older cars with no payments (mine mentioned in my story came AFTER the home), little to no credit card debt, we both brown-bagged it for work lunches. I shopped second-hand stores/yard sales both for household needs, clothing, even scratch & dent grocery.
We NEVER approached purchasing a home as a means to an investment vehicle to go on to bigger/better. It was housing. It wasn't/is not a status symbol to us. We made do until we could afford (comfortably) to change our housing situation. We also built, that is a HUGE difference. And it was bare bones. NO granite or upgraded cabinetry or flooring. Heck, we still have plain white walls. And keep in mind that our current home was built during the "sellers" market. So, if we had to sell right this very minute, no we would not be at a loss. Nor, for the other homes. Why?
1. Because we planned! AND researched, researched, researched our lending options.
2. We have never borrowed against our equity to acquire more. Do I want more? heck yeah! But I NEED more to know that my family has stable/secure housing.
Luck was not involved. It was/is intentional planning AND saving.
Kitchen Diva said:Amen to that (to the luck isn't involved!) Good for you and your DH for rolling up your sleves and being all American and WORKING hard and sacrificing and scrimping and saving and doing without at times!
It's hard to do without! I've been doing without Antonio Banderas for years! His wife apparently NEEDS him, so he can't be with me. (sniff, sniff) (sorry, just injecting a wee bit 'o humor, I'm punchy today)
I meant you were in luck that it was a seller's market. If you were trying to do the same thing right now, it wouldn't happen. Many people would like to be in your situation and be able to have homes that appreciated in value that they could sell for profit, but it won't happen for them for quite a while.I'm not saying you and you hubby didnt' work hard for what you have; you clearly did and you definitely deserve it. I'm just saying that alot of people aren't able to be in your type of situation right now because of the current housing market. It's not that they deserve it any less, or didn't make the right decisions.amy07 said:I'm curious as to why you say my family and I are lucky? Luck had nothing to do with it. Both my DH & I both worked very hard to save/buy our first homes, individually. There was no luck involved, unless searching and waiting for a house that was affordable to our individual budgets is getting lucky. We made HUGE sacrifices that many of our comtemporary friends could/would not make. Examples: We each drove older cars with no payments (mine mentioned in my story came AFTER the home), little to no credit card debt, we both brown-bagged it for work lunches. I shopped second-hand stores/yard sales both for household needs, clothing, even scratch & dent grocery.
We NEVER approached purchasing a home as a means to an investment vehicle to go on to bigger/better. It was housing. It wasn't/is not a status symbol to us. We made do until we could afford (comfortably) to change our housing situation. We also built, that is a HUGE difference. And it was bare bones. NO granite or upgraded cabinetry or flooring. Heck, we still have plain white walls. And keep in mind that our current home was built during the "sellers" market. So, if we had to sell right this very minute, no we would not be at a loss. Nor, for the other homes. Why?
1. Because we planned! AND researched, researched, researched our lending options.
2. We have never borrowed against our equity to acquire more. Do I want more? heck yeah! But I NEED more to know that my family has stable/secure housing.Luck was not involved. It was/is intentional planning AND saving.
JAE said:That is the difference between you and some of us who don't back Obama. I don't believe it should be the government's responsibility to ensure housing is affordable, either. The government should ensure that people obey laws and they should protect us from those who don't obey laws. If the people involved in this money mess broke laws the government should punish them.
The "Bailout Bill" refers to the Emergency Economic Stabilization Act of 2008, also known as the "Troubled Asset Relief Program" (TARP), which was proposed by the US Treasury Department as a response to the financial crisis in 2008. It aimed to give the government authority to purchase distressed assets from banks and other financial institutions in order to stabilize the economy.
The "Bailout Bill" failed in the House due to a lack of support from both Democrats and Republicans. Many lawmakers were concerned about the potential cost to taxpayers and the lack of oversight in the proposed plan.
If the "Bailout Bill" failed, there could be a significant impact on the stock market and the overall economy. Banks and other financial institutions could continue to struggle, potentially leading to a credit freeze and further economic downturn.
It is possible for the "Bailout Bill" to be reintroduced and passed in the future, but it would require significant revisions and bipartisan support. As of now, there are no plans to reintroduce the bill.
The failure of the "Bailout Bill" can potentially affect everyday citizens by causing instability in the economy and possibly leading to job losses, higher interest rates, and other financial challenges. It may also impact the availability of credit and loans for individuals and businesses.