I didn't think a housing crash was coming anytime soon until we talked to a lender about a different house. The amount of money they approved was shocking. I would be comfortable with about 60% of what they approved for and even then felt like we would tighten up the budget. IMO, we won't see this effects from this for a few more years though. It will take housing prices leveling off and buyers remorse setting in before the ball starts rolling downhill.
You still have to put a down payment of 20% when you buy a home, unless you qualify for a program that lets you put down less...but that then also means you can't have a large mortgage so it's not like you can buy a million dollar home with little to no down.
When you're buying a home, the bank needs to see your current income, wages over the last few years and obviously you need money for a down payment, Can people over-exert themselves in the housing market still? Absolutely. You have to also factor in taxes, heating, cooling, electricity. utilities and upkeep. Most people know what their mortgage payment will be & what their taxes should be so they have enough set aside every month for to budget for those and still have ecxess income from their paycheck.....but then get blindsided by the other expenses that go into a home. Or they don't have enough saved god forbid things start breaking that cost 10k+ to fix
But when it comes to buying and financing a car all they care about is your credit score. I may have great credit but absolutely cannot afford $1000 a month for car payments.
But I hate the comparison. I can be in over my head 2-3 years down the road when I buy my house and sell it for a profit. 2-3 years from now there is no way your car will be worth even what you paid for it, let alone more. Unless it is some sort of exotic car, a car is a depreciating asset 100% of the time
