Additionally buying a house was considered a wise investment due to the ballooning home prices. This myth was perpetuated by the banks themselves.
It was also ingrained into the fabric of the American household. How many time has one heard, buy land they are not making any more of it or if you want to protect your money from inflation buy a house, they always go up. For 3 generations this has pretty much been a constant reality, one would have to go back to the depression to find wisdom that went against this reality.
I remember many friends saying we just have to get in before we get priced out of the market forever. People where so afraid of becoming renters for life that they where doing anything possible to secure a house before prices doubled again and they where permanently locked out of the market.
We are not talking about experienced investors here we are talking about people who just wanted to ensure they where not locked out of the American dream. Sure there where speculators, but the reality is speculators where only a fraction of the market and where some of the first to bail on their notes.
There where also many who used their house as an ATM, but with the shrinking job market can you really blame them many unwisely used it to maintain their standard of living and to put off the pain of adjustment to some point in the future, with the hope that better times would cover the call. which while unwise is not that out of the norm hell the government has been doing it for years.
To be clear, I am not making excuses for them but I think we are holding the consumer to a pretty high standard given the boom bust economy, the constant decline of jobs over the last decade, stagnant wages over the course of almost 2 decades, that has reduced real buying power and the financial shenanigans that have taken place. To blame the consumer after they have seen the middle class destroyed is really just rubbing salt in the wound.
It was also ingrained into the fabric of the American household. How many time has one heard, buy land they are not making any more of it or if you want to protect your money from inflation buy a house, they always go up. For 3 generations this has pretty much been a constant reality, one would have to go back to the depression to find wisdom that went against this reality.
I remember many friends saying we just have to get in before we get priced out of the market forever. People where so afraid of becoming renters for life that they where doing anything possible to secure a house before prices doubled again and they where permanently locked out of the market.
We are not talking about experienced investors here we are talking about people who just wanted to ensure they where not locked out of the American dream. Sure there where speculators, but the reality is speculators where only a fraction of the market and where some of the first to bail on their notes.
There where also many who used their house as an ATM, but with the shrinking job market can you really blame them many unwisely used it to maintain their standard of living and to put off the pain of adjustment to some point in the future, with the hope that better times would cover the call. which while unwise is not that out of the norm hell the government has been doing it for years.
To be clear, I am not making excuses for them but I think we are holding the consumer to a pretty high standard given the boom bust economy, the constant decline of jobs over the last decade, stagnant wages over the course of almost 2 decades, that has reduced real buying power and the financial shenanigans that have taken place. To blame the consumer after they have seen the middle class destroyed is really just rubbing salt in the wound.