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What's a housing bubble?

By GreaterNYCDude follow GreaterNYCDude   2020 Apr 18, 3:21pm 582 views   1 comment         share      

Said my kid over dinner... so I tried to explain that people
borrowed what the bank would lend them, not what they could afford because it was believed prices only go up.

Then Ilooked up the sales history on our house. Its still not worth what the prior owner paid in the mid-2000's.... and that was almost 15 years ago.

Don't let your kids forget!
1   Patrick   2020 Apr 18, 4:08pm  

You might also explain that you can either borrow a house (rent it) or get a mortgage (rent money) for the equivalent house. One of them is probably cheaper than the other to live in the same style in the same area.

So then it's a matter of which one has a lower cost, renting or owning. Kids can understand that. (Thought not most adults, strangely.)

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