[Porsche-O-Phile]

I think we agree more than we disagree wcc. . . For one, I COMPLETELY agree that people who want to buy "big ticket" items like houses, etc. SHOULD put money down. Look at the insanity that 100% and 105%/110% financing has created in the housing market for an example of why. If people have a financial stake in something, they tend to value it more and are less likely to let it either go to hell or to just chuck it and walk away (or accept foreclosure).

That said, these kinds of "oh, just save up" posts crack me up because they're SO completely out of touch with reality. What should the savings level be in order for a person to be deemed "worthy" of homeownership then? 5% of gross salary for 5 years? 10%? 30%? Where would you draw the line?

The conventional 20%-of-purchase-price-down guideline is good/secure from an investor/loan backer standpoint but it's RIDICULOUS in this day and age from the point of view of discretionary income. Prices are WAY out of whack with salaries - and not just for houses. The inflationary effect on the average household is HORRENDOUSLY understated in the (biased and less-than-objective) federal numbers.

Savings is absolutely a virtue, and that goes for emergency/contingency "rainy day" savings, retirement/401k/IRA-type savings and purchase savings (like saving up for a large purchase). The U.S. savings rate is NEGATIVE right now for the first time in history, and although a lot of it has to do with young idiots spending their coin on "bling-bling" 22" Dub rims for their Lincoln Navigators and on 60" flat-screen TVs, a lot of it has to do with more "defendable" concepts - like the fact that it really does cost a lot more to live nowadays.

In years past, you didn't have to carry $60,000 worth of student loan debt to get an "average" job. You didn't have to pay $300 a month to own a car that isn't liable to fall apart under you. You didn't have to pay $50 a person per week in grocery costs. All these things add up and salaries have NOT kept pace. Not to mention the recent run-up in housing costs have the thought of purchasing such things seem completely INSANE for a lot of folks (me included). There's simply no way to realistically buy without getting a "liar loan" or a "sucker loan", so it's easy to simply say "aww f*ck it", give up and put the $$$ elsewhere. I imagine when there's an underlying belief that things are improving and hope is on the horizon, people might be more motivated to go after it, including finding the discipline to earn/save for it. Right now, prices are so high, it's a complete DE-motivator. It's nuts. Speaking only for myself, I am certainly not beyond sacrifice (I did it for years while in school earning a master's degree), but there comes a point when you have to ask the question, "is the sacrifice worth it?"

For housing in particular, I know a lot of people that are saying "no" and opting to live their lives with a modicum of enjoyment rather than either being miserable, cash-strapped and dejected, either due to being "house poor" and taking one of those "sucker" loans and buying in the bubble or saving up in the Polyanna-ish belief that maybe, some day they MIGHT be able to earn the right to sweat and worry about making their mortgage payment every month. . .

See the distinction?