Cash-strapped Americans are leveraging their homes to pay the bills

[Jack]

that's upper-middle class angst. Middle class and low middle class have had to tap into equity, as the OP sez

I agree, but can still see people getting a pool or a Kitchen make-over because the Joneses down the street have a pool or new Kitchen.

[Jack]

What difference does it make if all are paid in full in each billing cycle?
I pay as much as I can with credit cards for the airline miles.

Dude, I can't fuck with Sailor without you sticking your big, fat fucking moose nose into everything?

[Sailor]

Uh, ... so how many Credit Cards do you carry in your wallet?

Only 1. If I have to use it, it is paid in full that month.

[Sailor]

It's why I should be anointed King.
Common sense fiscal mentality would be good for the country. Unfortunately that's a disadvantage of a two party democracy. Each side panders to it's base for free shit and we always live beyond our means because of that.

Good insight Doc!

[anonymoose]

Dude, I can't fuck with Sailor without you sticking your big, fat fucking moose nose into everything?

Not PC. Nose shaming on internet. This may show up in MSN.com

[cancel2 2022]

we are finally getting wage growth above inflation, and it's likely to improve , Household expenses are bitch to cover .

Sadly there seems to be a return to junk bonds, could cause big problems down the line.

https://www.cnbc.com/2018/09/07/bond...ield-bets.html

[Jack]

Not PC. Nose shaming on internet. This may show up in MSN.com

[PoliTalker]

Hello Sailor,

Very smart man. Fiscally responsible people always do well in life. If you do not have the cash to pay for something, you should not be buying it.

Was the vessel you trust your life to, purchased for cash?

What about airliners? I don't know, but I assume big transportation companies like the airlines get loans to pay for ships, jets and big stuff. I heard that the biggest corporations go through money so fast there is a sort of instantaneous loan market, with interest by the minute. Maybe somebody here can fill us in on how that works. All I know is the world of big finance is kind of the bedrock that our whole economy stands on, and if that ever failed it would take the rest of us down with it.

All I'm really saying is that credit can actually be a very wise use of money, if it is used properly. There is good credit, and there is bad credit.

Because we do have credit, our economy is far larger than it would be without it.

If you couldn't buy a house on credit, then all those guys that had jobs building the house would not have jobs.

[Jack]

Sadly there seems to be a return to junk bonds, could cause big problems down the line.

https://www.cnbc.com/2018/09/07/bond...ield-bets.html

Junk Bonds @ 5% ... I LOVE those things!

[Sailor]

Hello Sailor,



Was the vessel you trust your life to, purchased for cash?

What about airliners? I don't know, but I assume big transportation companies like the airlines get loans to pay for ships, jets and big stuff. I heard that the biggest corporations go through money so fast there is a sort of instantaneous loan market, with interest by the minute. Maybe somebody here can fill us in on how that works. All I know is the world of big finance is kind of the bedrock that our whole economy stands on, and if that ever failed it would take the rest of us down with it.

All I'm really saying is that credit can actually be a very wise use of money, if it is used properly. There is good credit, and there is bad credit.

Because we do have credit, our economy is far larger than it would be without it.

If you couldn't buy a house on credit, then all those guys that had jobs building the house would not have jobs.

Everyone of them. 50% up front, another 25% upon substantial completion, the last 25% upon acceptance and delivery. There has never been a mortgage on any of my vessels.

[Fentoine Lum]

Danielle DiMartino had a great comment on this:

It is SO DIFFICULT to read these stories. The #Fed is responsible for plight of lower income earners who've suffered as Greenspan, Bernanke & Yellen chased delusion of the "wealth effect."



The article lays out the results.





Cash-strapped Americans are leveraging their homes to pay the bills


As U.S. household debt rises and wages stagnate, millions of Americans are tapping into home equity to keep up with day-to-day expenses.

Twenty-four million homeowners believe borrowing against home equity is an acceptable way to cover regular bills, according to a Bankrate.com report released on Wednesday. Cash-strapped millennials, low earners and the less educated were most likely to think home equity offered an appropriate solution to ordinary bills.

"Regular household bills should be funded by a regular household income, not home equity," said Greg McBride, chief financial analyst at Bankrate.com. "Wage growth has been elusive, but rising household expenses have not. And now home equity is being seen as a lifeline for those who are strapped for money with little wiggle room."

The study, conducted by research firm GfK, surveyed a national sample of 1,000 American adults-719 of whom were homeowners-from Sept. 7-9.

Almost 1 in 3 homeowners who earn less than $30,000 per year said it's OK to tap into home equity to cover their everyday bills, more than triple those who make $75,000 or more. Twenty one percent of those with no more than a high school diploma agreed, nearly doubling those who have a college degree. And 22 percent of millennials also felt home equity was an appropriate resource for paying bills, compared with only 12 percent of older Americans.

"These people are living paycheck to paycheck with little or no emergency savings-and they're scraping up money any way that they can," said John Hope Bryant, chief executive officer and founder of Promise Homes Co., a property asset manager that offers affordable housing and financial support services to families.

Almost 1 in 4 Americans have no such savings, according to a June Bankrate.com study. But even cash-strapped homeowners are more fortunate than many, Bryant said, since U.S. homeownership has fallen to the lowest rate in more than 50 years.

About 3 in 4 homeowners said home improvements or repairs are an appropriate reason to borrow from home equity. Other reasons included debt consolidation and education expenses, the study found.

U.S. household debt has continued to rise through the second quarter, propelled by an increase in mortgage borrowing, according to a Federal Reserve Bank of New York report released in August. Total household debt rose 3.5 percent from a year earlier in the April-to-June period, to a record $13.3 trillion, while mortgage debt also rose 3.5 percent, to a whopping $9 trillion.

The cost of home equity borrowing is on the upswing as well. Interest rates on home equity lines of credit, otherwise known as HELOCs, are at their highest since the 2008 financial crisis, data from Bankrate.com show. This increase is in line with U.S. benchmark interest-rate hikes.

"The high interest rate on home equity debt is going to exasperate the situation," Bryant warned. "And it could ultimately dampen property sales."


http://www.chicagotribune.com/busine...919-story.html

We don't care about those people in america, they get sacrificed to subsidize the ruling aristocracy. Don's tax cut was another straw added to the proverbial camel's back.

[cawacko]

We don't care about those people in america, they get sacrificed to subsidize the ruling aristocracy. Don's tax cut was another straw added to the proverbial camel's back.

Actually, anyone who makes $30K and owns a home lives in flyover country and they aren't really part of America. So no, the ruling coastal aristocracy doesn't care about them.

[anonymoose]

Actually, anyone who makes $30K and owns a home lives in flyover country and they aren't really part of America. So no, the ruling coastal aristocracy doesn't care about them.

It's as if there's two different currencies.

[Jack]

30K might buy you a tent in somebody's backyard in Walnut Creek.

[Fentoine Lum]

Actually, anyone who makes $30K and owns a home lives in flyover country and they aren't really part of America. So no, the ruling coastal aristocracy doesn't care about them.

No, there are plenty of the folk you speak of on the coasts as well. Your party, both parties, bait you/us with false enemies lest you/we dare cast your/our gaze toward the power structure itself.