What $10,990 bought in 1955....

[The Velveteen Ocelot]

28. Ah - there's the rub. What does "afford it" mean?

Of course people should be free to buy what they can afford, and if you can manage the payments on a $500K house, go for it. But where the wicket got sticky is that many people (with the encouragement of some unscrupulous real estate sales people and mortgage brokers) were led to believe they could afford something they really couldn't. So they bought houses that were so expensive that they could barely afford to furnish them -- and when dad or mom lost their job or a kid got sick, they couldn't make the mortgage payments. And after the housing market collapsed they couldn't even get their investment back. And there's this - in my area, the neighborhoods where people were getting their utilities shut off weren't so much the poor neighborhoods, but the fancy new housing developments in the suburbs. The utility bills for a big place in this cold climate can be absolutely crushing.

So - if "affording" a big house means you can buy furniture, and that you can keep the lights on and make the mortgage payments if you lose your job because you have plenty of money in the bank to carry you through hard times, then you truly can afford it.