Are You or Anyone You Know House Poor?
When the cost of mortgages rises, it becomes utterly difficult for people to pay off their debts and at the same time, meet the other needs of the family like food, clothing, medicine and education. Those who use up half of their disposable income to pay mortgage and housing expenses are at the brink of losing the very homes they live, especially when there is very little money left for other necessities.
Everyone dreams of living in a beautiful, spacious house they can call their own. Couples are particularly in need of moving to a much bigger house to accommodate a growing family, as well as switching an old car with a newer, larger one. Costs of raising a family can be overwhelming most of the time and those who are living on meager income are the first ones to suffer the effects of being house poor.
In Canada, many households are “house poor” – living inside expansive houses but having little money for groceries, gas and other stuff, let alone occasional luxuries. One can expect many Canadians with majestic dwelling actually leading “hand to mouth” lifestyles, and not with affluence and comfort.
The saddest part is that these house poor Canadians rarely talk about their mortgage problems, but continue living each day as if all is well, though it rarely is. Statistics Canada reported that Canadians’ debt-to-income ratio in the fourth quarter of 2014 reached an all-time high of 163%; meaning for every dollar earned, Canadians owe $1.63, according to CBC News.
In the US, locals may stand a chance with a stronger US dollar granted they have stable jobs with modest incomes. While a relatively stronger US dollar hinders foreign nationals from buying US properties, it offers American citizens some breather. In 2015, Euro, Ruble and Canadian dollar all stand weaker against the US dollar, making American properties less attractive to Russians, Europeans and neighboring Canadians.
Based on the US real estate market trends, it may be wiser to live in modest houses and extend the wait for purchasing that dream home. The year 2015 may look promising for Americans after several years, but if the present house can sufficiently shelter the family, then it pays to spend money on meeting the family’s other essentials, and spare some for savings and investments.