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Old 01-27-2012, 04:11 AM
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Bob Shiftright Bob Shiftright is offline
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Join Date: Feb 2006
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Quote:
Originally Posted by 16n69 View Post

A home has traditionally been the biggest and in many cases, the only investment one can have, therefore acceptable debt...not the same as depreciating items.


Real estate has characteristics of both an asset and a liability. A house can provide shelter, but it also commits the owner to an infinite stream of maintenance costs and tax payments.

Once a speculative bubble bursts, it can take years if not decades for prices to recover.

Still, in 2010 about 30.3% of owner-occupied homes were owned free and clear, without a mortgage according to the Census Bureau. http://www.calculatedriskblog.com/20...hip-rates.html I think that number is probably fairly accurate. My neighborhood is more than 30 years old and about half are original owners so they shouldn't have mortgages. Not everyone went crazy borrowing during the credit bubble!

I'd prefer to pay cash and to drive a cheaper car and live in a smaller house than I can afford than to be a slave to debt. It would drive me crazy to wake up and need to go to a job I didn't love to make a car payment.
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