What’s it like to be facing foreclosure? The news this week that foreclosures in California are at record levels means that some households are facing unmanageable levels of stress.
An article on MSN Money asserts that the housing crisis is causing an increase in divorces. It’s understandable: When two incomes are required to meet the monthly mortgage, there’s no margin for error. If one thing goes wrong — a job loss, an illness — the whole house of cards comes tumbling down.
A survey from AOL Real Estate and Zogby International released this week revealed that 43 percent of Americans spend more than 30 percent of their budget on housing expenses, which means they’re “cost-burdened,” according to standards established by the U.S. Department of Housing and Urban Development (HUD). The same survey found that 22 percent of Americans are a job loss away from losing their home or apartment, and 30 percent are working paycheck to paycheck to cover their housing costs.
But that doesn’t mean Americans are giving up on home ownership; quite the contrary. Nearly 7 of 10 respondents felt that real estate was still a viable investment. And more than half of homeowners surveyed said that if they were forced from their homes, they’d buy another one instead of rent. More than half also said they thought their homes would be worth more in five years.
It’s obvious that Americans have a strong desire to own homes. Our parents and grandparents did; it’s the “American dream.” Unfortunately, the dream can become a nightmare when people stretch themselves to the limits of their finances and physical and psychological limits, as many are now learning the hard way. (My parents’ home cost $11,000, and it was paid off within three years.)
Homeowning should not be this stressful. It should make sense financially. It should not take a toll on your marriage or your psyche. I hope that in the future, people think long and hard before committing themselves to a mortgage that obligates both members of the household to work heavy-duty full-time jobs for 30 years.
If you can’t stay under that 30 percent number that HUD recommends, maybe you shouldn’t be owning a house.