[pepper24]

[QUOTE=1stLand;2674117]

Originally Posted by chemgear

There was a completely different philosophy 20 years ago, regarding the use of credit for the average consumer.

People more willing to go into debt to buy what they want today than they were 10, 20, 30 years ago.

I don't think 3x's or 4x's the average household income as a benchmark for housing prices is as relevant as it once was

With the 10 year boom from 1997 to 2007 we've managed to get in a situation of housing prices becoming 4-11 times median income. Historical it's been 3-4 times median income. You can factor in dual incomes, built up home equity, growing job market etc. but you could also counter that with record low interest rates which can only go one way which is up along with much better investments out there than real estate. At record low rates, people are in huge debt with unsustainable mortgages. Not a fun life being house poor. People can only "sacrifice" for so long before that changes. It's a losers game that I want no part of either hence living within my means.

The changing views about debt are unfortunately correct but it's the main cause of why we're due for a big mess. In our grandparents generation debt was a a bad thing which was frowned upon therefore you saved up and bought what you could afford. You lived within your means. Our parents generation with the introduction of credit changed that and my 25-34 demographic (Generation Freedom 6/49) is even worse. The cycle has to end.