More astonishing housing market statistics

This article in the LA Times surveys a cross section of people to discover their housing purchasing plans and stories. It gives a number of statistics about home ownership and the increasing reliance of Americans on debt.

Toward the end of the article, the risk of all of this debt is mentioned. While debt can be perceived as a tool, it should also be perceived in the context of its inherent risk. When you borrow money, you have to pay it back. If something happens to your income stream (you get laid off, you need to change jobs, an accident, etc.) that debt that was liberating you and helping you have the lifestyle of your dreams becomes a weight around you neck dragging you down and forcing you to either try and sell what you bought or declare bankruptcy.

If the market turns down and people's houses are "flipped" the opposite way (they owe more than the house is worth), we as Americans are going to see a lot more bankruptcies and hard times.

It makes me mad and sad at the same time when I read about why people are living this risky lifestyle. Here's a quote:

Irvine-based Financial Freedom Corp. says one of the major reasons people buy its reverse mortgages is "lifestyle enhancement" — extra money to have fun. Financial Freedom says it is on track this year to nearly double the 5,000 reverse mortgages it sold in 2004 in California.

Read the article and leave a comment.