3 ms·

Then those people had spent beyond their means when they purchased the home. When you buy a home, part of the risk is that most of your net worth is wrapped up

Then those people had spent beyond their means when they purchased the home. When you buy a home, part of the risk is that most of your net worth is wrapped up in the home, and as a result you may not be able to move if you have to sell at a harsh loss. If you are not prepared to ride out a dip in the housing market, you shouldn't buy in the first place.

ericd 8y ago
The problem is that if everyone is making stupid bets (and the bank is also making stupid bets), you may also have to make a stupid bet if you're determined to own your home. Or you could rent, but that's not just an economic decision.
- masonic 8y ago
  Or, you could rent and live frugally before the crash, and then buy cheaply.