Because one needs to consume housing, regardless of financial status. There are basically two ways to consume housing, to buy or to rent. Buying and renting are easily substitutable strategies and thus by basic economics the prices are equivalent except in speculative bubbles (renting is cheaper) and in panic crashes (buying is cheaper). Since the prices are generally equivalent it makes sense to buy a house if one would prefer to not be subject to landlord-externalities and/or if one would prefer to own one's housing outright 30 years in the future, when retirement looms.

None of this has anything to do with student loan debts. They are utterly irrelevant with respect to whether one should choose to buy or rent housing. It only makes a difference as to how much housing one can consume.

You're probably right.

Most of my life I had the impression, that buying a home would be a huge waste of money. Funny thing is, I always saved much money for the future. If I had bought a home, I would probably paid as much per month as I now pay rent AND have money invested for the future, so I could subtract those payments from my monthly savings.

Perhaps a combination of

- a sense of normality ("everyone else I know does/did it, so will I!")

- a sense of numbness ("I already have 45k in loans, what's another 25k?")

- optimism ("since I went to college, I'll be making more money as I get older and can pay off all of this faster!")

- apathy ("meh, I'll deal with it somehow")

If houses are rapidly increasing in price, interest rates are low, and you have sufficient future income expectations, it makes sense to buy a house as soon as you can.

The car loan seems like a bad idea.

If the student loan is low-interest, it probably makes sense to invest your extra money and only pay the minimum on the loan. It's cheap money.

The mortgage may be cheap money too, and can pay off depending on how long they stay in one area. You still need to pay for housing no matter what, and the interest is tax deductible. (This is not an excuse for buying the biggest house you can afford; I mean a lateral move from renting to owning.)

The mortgage interest is not tax deductible in Canada.

Also, taxes are much higher in Canada than in the U.S.

I'm a bit skeptical about this article. I think the bottom line is that he had a bunch of stocks and mutual funds that he's been accumulating since he was a teen.

Most people lack the foresight and advice to do such a thing (God, I wish I'd done it) so this article doesn't really apply to the majority.

I see.

It just shocks me to see how people who make good money still get deep into dept.

Well, maybe it's just that I came from a poor family, where taking any credits was only done by people who are bad with money. I had a student loan of 4000€ and all I wanted to do was pay it as fast as possible.

Many people use credit to buy MORE than they need, and MORE than they can afford. A new car instead of a gently-used car, a larger house that just becomes a sink for their income.

That doesn't mean credit is bad - it can be used as a leverage to do more with less - but people with money problems tend to use both cash and credit badly.

If it was 25k in credit card bills from vacations meals out plus a 5k jetski loan, I'd be tut-tutting too.

At some point in the early to mid 2000's, almost everyone I knew, as well as almost every financial writer, was telling me that I was insane for not buying the biggest and most expensive house the bank would let me.

real estate speculation can be quite lucrative, but it's all about location. Following that advice in Vancouver for example would have been a great financial move - at least in retrospect.