“Don’t drink the housing market kool-aid. The affordability gauges used by the banks – i.e., people who make money selling mortgages – are too slack. They let people buy more house than they can comfortably afford while meeting their savings obligations. If your mortgage and all your monthly debt payments would exceed 30 per cent of your monthly pretax income, then back off and keep saving. Worried that the price of houses will keep rising and you’ll never be able to afford to buy in? Won’t happen. When people like you are priced out of the market, the market must fall.” …
“Explore your inner renter (Generations X and Y edition). This is already starting to happen in the United States – young adults are postponing home ownership and instead renting for longer. Frankly, there’s a good argument for buying houses in U.S. cities because of rock-bottom prices. But young adults realize that mobility is an asset when looking for a job. Plus, they’re marrying later and often carrying big student loans. Renting makes sense in this context, as long as you’re saving the money you’d otherwise be spending as a homeowner.” …
“Explore your inner renter (Baby Boomer edition).Enough with property taxes and those never-ending maintenance costs, not to mention condo fees. If you’re a retiree selling the house where you raised your family, think about renting your next home instead of buying.”
- Rob Carrick, in ’12 ways to build wealth in 2012′, G&M, 22 Dec 2011
Wow. This is… sudden.
The implications of cohorts following this advice is a housing market crash.