Every statistic under the sun tells us that some obscenely large percentage of Americans (often 50%+) cannot afford $1000 emergencies, do not have adequate health coverage, can’t afford to retire and are often on the verge of bankruptcy due an innumerable # of reasons. How did these same people come up with cash to own a home?
I understand they might have owned their homes since pre pandemic times, but homes have not been cheap for a very long time. You’d still need substantive amounts of cash to own/maintain one and be careful to have reached that level of cash accumulation without going bankrupt in the process. Obviously some people are more comfortable with debt (credit cards or otherwise) than others, but I find it hard to believe that a whopping 60+% of major asset owning class got there by just being lucky with money.
In: Economics
Even post-2008, banks will approve you for a mortgage that is FAR higher than what you should realistically be paying. Our bank pre-approved us for a number that made our head spin; we ended up buying a house that cost about 70% of that.
We were comfortable at 70%, but then house prices went insane after COVID. We are spending far, far more on property taxes than we’d ever anticipated and it’s definitely straining the budget. I’m so glad we didn’t max out the amount the bank would have allowed or we might be in serious danger of foreclosing right now.
Just because a bank will lend you a certain amount of money doesn’t mean you should take them up on the offer, but a lot of people do, to their financial harm.
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