Well I waited too long (due to uncontrollable circumstances) and it looks like I'm priced out of the housing market--again. Every once in a while, I casually check the listings on realtor.com and lately I've noticed a rise in average home prices in Southern California. As with the housing bubble, homes I wouldn't be caught dead in are now, again, out of my reach. I've also noticed that the site changed its default for the down payment from 20% to 33%. I assume this reflects the tighter restrictions in the lending industry, which is understandable. But it still makes the market that much more impenetrable.
While I'm happy that the primary source of the economic downturn is on the road to recovery, I can't help but resent the fact that homes are still too expensive and that so many people are to blame for it. Yes, the blame falls mainly on the people who couldn't afford the homes in the first place but bought them anyway and, even more so, on the mortgage lenders who encouraged them to do this. But what about the people with steady incomes who could "technically" afford their expensive homes because they were willing to fork over 60-70% of their net incomes but shouldn't have? They may be scraping by and will most likely escape foreclosure, but they're still paying an excessive amount in mortgage. And because people were (and increasingly are) willing to pay for overpriced homes, it puts pressure on other would-be buyers to play along or get left behind.
I don't know if I should hurry up and jump in before it's too late or just call it a day and give up. We all know the key to building wealth in a community is to own a home and pass it down to the next generation. While as an African-American woman I doubt I'll have children to bequeath a home to, I still fear I'll need lots of money to afford living in a resting home in my final years. My grandfather paid over $7,000 a month to stay in a nursing home! I can only imagine what the price tag will be 50 years from now.
In all of my 33 years, I may not know much, but I do know that economic security can save you from a lot of hassle. When Sallie Mae started playing games with me and moved the start date of my loan payments 6 months earlier than they warned, did I sit there and take it? No! I paid those suckers off! I didn't have to put up with that crap. They messed with me, so I deprived them of a customer to engage in their game of cat and mouse, not to mention all the interest payments they lost out on with my paying off the principal so early. I didn't want to dip into my savings to do it, but I had it to spend and I got a major headache off my hands. Plus, it felt good to "stick it to them," albeit on a negligible scale. (I wish more people could do this; strength in numbers would really make them behave or suffer!)
I always want to be in a position to escape the mistreatment (and economic enslavement) of the moneyed and the corporate. If I purchase a home now and sell it back 50 years later for a nearly million dollar profit, I'll be in a better position to do this. But how desperate am I to attain this privilege? Should I live miserably in a crappy house that won't break the bank? Should I live less miserably in a less crappy house that WILL break the bank? (Living comfortably in a nice house isn't even a consideration at this point!) Or should I just keep my money, rent a bachelor, cross my fingers, and hope for the best? With the economic uncertainty we're facing in the future, I think finger-crossing and hoping would be wise in all 3 scenarios.
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