Nearly all Americans would be homeless, most carless, if not for financing.
Just the thought of that is rather scary, if not downright horrifying. (How are people so cavalier?)
So something like 85% of all (non-investment) properties are sold with a mortgage. And we all know about the auto-debt bubble that's become obscene.
How does no one sit down and wonder, given these facts, is the Western human society designed in a way that's flawed? As in, are things mis-priced? Not only with fruits/vegetables, apparel, etc, but with the larg(er)(est) assets that most Americans will (ever) own. It's quite possible that the out-of-reach pricing was arrived at to purposely keep the working as obedient, non-combative debt slaves.
There's one notion I (and you should) live by. Don't buy it unless you can buy it with cash. (And should all else fail, find a bridge without safety nets). End of story. Done. Moving on.
Do you have a link for what you are saying here?
It is very unrealistic for the majority of the public to buy a home without financing. The catch is the banks are already back to sub-prime lending, other less than 20% down mortgages, and it just seems never ending because once they exhaust the pool of prime buyers, they target mid-prime and exhaust that, then it is sub-prime because the mortgage refi's are dried up due to interest rates.
So when is enough is enough for a bank? Never.
This is basic college economics.
There is a difference between living within your means and purchasing a house you will live in for 30 years upfront with cash.
If you have the cash to pay for a house in full, but can achieve an investment return higher than the rate on your mortgage, it would be financially advantageous to invest the money and take out a low mortgage rate instead of paying for the house in full in cash.
While I totally agree what you're saying, what I think Monaco meant by that was "only buy it if you could buy it without credit," as in, buy it with credit if it's advantageous, but if you don't have the means to buy it in the first place without credit, don't buy it at all.
I don't think it's a huge surprise between the correlation between loosening mortgage standards in the 70-80s and rise in property values from that time until now. What's it matter though as long as consumer credit doesn't freeze ie fannie/Freddie end?
If no one could afford to buy a house, the price of houses would come down until people could buy them, relative to the cost to build.
I think we would be looking at a lot smaller houses if there was no financing available.
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