The majority of people who are living paycheck to paycheck don't have enough assets to cover debts.

Furthermore, paycheck to paycheck living outside of poverty and disability is rarely the result of a one time mistake, it's usually due to an inability to budget and save day-to-day. Which is the reason they end up with more debts than assets.

Not to mention people who can't afford their house can often not afford to take care of their house, which reduces its value.

Upkeep’s a killer. I kept having people tell me to buy in my 20’s, and I couldn’t fathom their logic. I could rent a 4 bedroom house for less than a mortgaged, let alone alone a mortgage plus upkeep. I kept doig the math, and I’d have to tie up a huge chunk of capital, and hope the house appreciated faster than upkeep costs, and that I didn’t piss away all gains again in realtor fees when I next needed to move. But really it’s the upkeep everyone kept ignoring in these conversations. $300/mo in my region is pretty standard, and no one would acknowledge how big this cost really was.

Rents finally started to skyrocket where I live, so buying finally made sense for us to try to lock in our housing exoense. But even then, the upkeep occassionally makes me wonder if I did the math right. Like can I put off buying a new roof another year? Or will that eat up my maintanence budget for the next couple years?

I know it’s a terrible answer but buy a newly constructed house. That’s all I’ve bought and the maintenance on them is close to nothing. Plus the house will be a lot more energy efficient and save even more money. Just stay away from an hoa or condo.

The premium on new construction is around 20% vs existing structures, so you arent saving any money, just paying up front (and financing it to boot).

Plus many people want to live in an already established neighborhood.

I’m not so sure about that. My brand new house in the Portland metro was cheaper than comparable older houses. I do get screwed a bit on taxes but they’re still lower than they were at my house in California for the same price. Overall I’m saving money. Going on three years and the only expense I’ve had in upkeep is air filters.

Also both new homes I’ve bought were in existing neighborhoods. Not all new homes are in new developments. I’m fact, I would avoid those like the plague. HOA hell + possible mello roos if in California.

You can be as "not sure" as you want, data doesn't lie

https://www.trulia.com/research/new-home-smell/

Portland happens to be among the metros with the smallest new house premium at 14%. Thats still $28,000 premium on a 200,0000 house.

Sure "not all new homes" are in new developments, but the vast majority of them are. Most neighborhoods simply don't have empty lots to build on, they don't exist, any new homes are teardowns.

I’m guessing trulia is looking as asking price because that’s definitely off based on actual experience shopping around. Because of property tax being much lower, older homes can ask a lot more. Sure new developments here are asking 600k+ for a tiny condo but they’ve all been reducing prices. In my part of town my house was more than 50k lower than an almost identical copy of my house down the street that’s been here for 10 years.

Besides, I never said all new homes were cheaper so I’m not sure why you’re even trying to argue it. Shop around and you’ll find a deal.

Agree in theory, but quite often that asset is not sellable as its underwater. End result is a foreclosure and/or bankruptcy. If the underlying behavior is not changed then people can spiral into further debt that they cant get out of as they already spent their once every seven year BK ticket. If people don't know how to budget you get trapped.

But yes I do fully agree, I would much rather be broke with a large income than a low one.

Often that debt is spread out on 5 different credit cards and there is no asset to sell other than shoes (a favorite of both genders) or lifestyle "influence".

The trouble is, in America the bigger mortgage often comes with a better school district.

> The trouble is, in America the bigger mortgage often comes with a better school district.

That's because our metric for school and school district quality largely is a measure of effects of socioeconomic status of the students, not anything the schools actually produce. So, yes, the schools in areas that have a higher buy-in cost have better marks, because they have on-average students better set-up for success.

That doesn't mean the students in that district, if individually moved to a different district, would do worse, it just means that the students who would do worse independent of district are lesd likely to have parents that can afford to live in the “better” district.

It is actually more due to the students who are not there. Yes it is true that the actual teaching is little better between districts, but the number of disruptive students that prevent any learning is vastly less in the expensive districts.

If you have the ability to kick out any student who is disruptive you can turn any school in any area into a high quality school.

This is then compounded by giving more money to the successful schools and less to the failing schools. This seems paradoxical as most students are zoned for a school and don't get to elect to transfer to a better one. So they are stuck in a bad school that is going to get worse due to reduced funding for failing. So kids who's parents can afford to send them to a good school district are rewarded driving home that generally where you start socio-economically is where you end up.

> the number of disruptive students that prevent any learning is vastly less.

The evidence doesn't really support that, though; students in a “bad” district don't have worse performance than students with similar background in a “better” district (whether because of distraction or any other reason), “better” districts just have more students with backgrounds which are correlated with educational success, of which the strongest factor is parental education.

The OECD report (this one: http://www.oecd.org/education/school/programmeforinternation...) would like you to believe that student background does not determine student performance. They do find a correlation, but it varies substantially between countries, suggesting that other factors are at play.

According to that report the important factors are student and teacher discipline and school atmosphere, and on can easily understand why all of these might be better in an affluent suburb.

In my city, there are 5 high schools in different parts of the city. There is a huge difference between the rankings of 2 schools compared to the remaining three. Funding and teacher pool are pretty much the same source. The main difference is the students and their families. The parents in those areas are well educated and have high income. If anything the best performing schools looks like a dump compared to the 3 lower performing ones. I'd say student background plays a huge part on their performance.

> They do find a correlation, but it varies substantially between countries, suggesting that other factors are at play.

Sure, but we’re talking about what explains variation between school districts in the same state in the US, not variation among OECD countries. I'm not saying that education policy and practice can't have a difference and doesn't globally, I'm saying there is virtually no evidence that the difference within districts that people in the US might be choosing between is driven by much of anything beyond background.

I believe nothing when it come to data on educational outcomes as it has all been totally corrupted by politics.

Do you think smart people would bother to spend a fortune on education (either directly via private schooling or indirectly by housing) if the school didn't matter? Follow the money, not the rhetoric.

More directly I have spent sometime helping out in different schools and I have seen with my own eyes the consequences of a single disruptive child on the learning environment - all the teachers time is sucked out dealing with this one student. I can't imagine trying to teach in a classroom with 3 or 4 disruptive students.

> Do you think smart people would bother to spend a fortune on education (either directly via private schooling or indirectly by housing) if the school didn't matter?

Yes, because smart and well informed are not the same thing, and even smart people who have access to systematic information are not immune to dismissing that information due to cognitive biases, particularly confirmation bias.

Quality of school district is also a well worn socially acceptable cover for avoiding proximity to those disliked for reasons of race or class, and smart people can still be racist and/or classist, and are more, not less, likely to seek socially acceptable cover for that.

I don’t seen anyone mentioning all the learning that takes place at the home. Rich parents likely have more time to spend helping their kids do homework or the money to hire a tutor.

Maybe more people should rent.

>and living paycheck to paycheck because you took out too large of a mortgage. In one case you have an asset to sell if needed.

Did a lot of people wrongly (as it turned out) think that in the 2008 Great Recession?

A lot of people were manipulated and lied to by professionals with a profit motive.

The average person is not a mortgage/real estate expert. They trusted professionals who misled them because of the profit motive. (For an example look into the reasons for the 2008 housing crash)

The average person might not be an expert, but they should know what their monthly payment is versus their take home pay.

Even knowing this plenty of people put themselves in precarious financial situations when buying a home.