The Dream of Home Ownership

My wife showed me a comment on one of her young relative's social media page. The commenter stated they wish the housing bust would happen soon, so they can afford a home. It made me think. 

I know some people that are comfortable paying rent for the rest of their lives, and avoiding the demands of owning a home. I understand their opinion, but my experience says they are in the minority. The majority of people want their own home, and with today's market, it's out of reach for the young, and not looking too promising in the near future. That's what led to the comment. 

In my opinion, and it's probably shared by many, the high cost of a home purchase is not sustainable. The prices are inflated for many reasons, but regardless, the lack of young home buyers will lead to innovation, if not the opportunities afforded by a severe drop in real estate prices due to a lack of buyers. To make things worse, those paying the inflated price will find they're underwater, and with monetary inflation, find their risk is more than they can pay.  Will lenders take a loss? Can lending institutions handle the loss of income, while waiting to complete foreclosures?

One thing I've noticed is the demand for larger homes. I've seen it with people I know, and on the remodeling shows. That, and the demand each child has their own bedroom, with another room for their play, or study. It's as though the outdoors is something to be avoided. Like a zoo, the "enclosure" needs to have everything, which comes at a cost. Although it's nice to have such things, how many stop to think of the later years, when stairs are insurmountable, the large areas can't be cleaned as necessary, and the cost to condition the large unused spaces become burdensome?  What about the tremendous amount of income used to pay the interest for the mortgage? With a smaller home, and the realization it will be more than comfortable after the children have grown, wouldn't the money be better spent on retirement?

It's a mess, and unrealistic expectations led to the mess. How it ends up is to be seen, but it sure appears it will be as bad as the financial crises of sub-prime mortgages.