Avoiding The Next Housing Bubble?
The housing bubble is news. Again. Still. It’s like the nasty rash that is never going to clear up, and all anyone wants to know is how to avoid the next housing bubble. Sadly, it doesn’t look like there are going to be easy answers, any more than there are going to be easy solutions.
It starts with the finger pointing. Was it your neighbor taking out the loan they couldn’t afford to buy the house for way too much that started the bubble? Or was it my neighbor, the “evil” loan originator who forced you into getting a home equity line of credit so that the kids could have a new car, not realizing that you were going to get laid off and not be able to make the payments? Or was it that guy at church who kept talking about how much money he was making flipping homes, how great that was, how easy, how profitable, since houses never lose value?
Or were we all a pack of fools? Did we all just want to desperately believe that this house was not just the roof over our heads, but the ticket to the good life and a nice retirement?
And then there’s the government . . . . .wait, there goes the finger point again. I think you are getting my drift. If we want to avoid the next housing bubble, we’ve got to do a few things differently:
Take some accountability. It was me. I did it. I over spent. I borrowed more than I could afford. You did too, which is why we both dread opening the bills. That’s not anyone else’s fault. Oh sure, some people made it easy for us, but the road to Hell has always been greased.
Use your head. I didn’t read the fine print. Did you? I knew better than to blow £3,000 on a new wardrobe for work, especially with my student loan payments sky-high. You knew if you bought the boat it would be a stretch. We both just didn’t think about those things at the time. Prudence rather than impulsiveness would have saved us from our current nightmares.
Buy only what you can afford. No, that’s not the stuff of dreams, but we can avoid the next bubble and have it all eventually if we can be disciplined about not having it all now.
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