Quote:
Originally Posted by westopher
This really sums up the big picture here. People are left with no money after their mortgage and living expenses, then they use credit for basically every form of entertainment and material possession they want and can't afford. Giving people "cheap" credit is whats eliminating the middle class. Everything the average person is buying is costing them 1.1x what it actually costs. Its not easy to get ahead when you do that.
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Its also people living above their means. A 300k mortgage today costs around 1200/mth over 30 years, and that was just based on a single modest income. Our second income is just 'bonus', for savings, vacation, rainy day fund, lumping into mortgage principle, etc etc. There is no way we would be renting a house anywhere close to what we have bought for 1200/mth. If we look at rents double that, then we are just getting into the ballpark.
We obviously do not expect rates to stay this low for 30 years. But to say credit is the only form of money left after mortgage and living expenses is a bit extreme, and people also need to take ownership for their spending habits regardless of whether you rent or own your home (or lease or own that fancy BMW or Landrover)