Big Homes, Big Problems

I have one small thing to add to Mr. McGinn's article. Yes, consumer greed is partially behind the McMansion boom, however, as my husband and I found out four years ago when we purchased our current home, many first-time homebuyers can not take advantage of a first-time homeowner loan if the land the house sits on is worth more than the house. Let's face it, land is getting more expensive as Americans leave the cities for the suburbs. So you end up with builders who want to cash in on people wanting new homes, but the home has to be worth more than the expensive land so the only option is to build McMansions almost on top of each other.

If you ask me, the whole system is messed up and needs to be torn down and replaced.

The current administration with the assistance of the FED boasted for several years that they were assisting in"American's achieving their dream of owning a home". Well, this is a big lesson in the concept that just because it is your dream does not mean you should have it come true. It comes down to this, the Government and the FED dropped the rate they paid banks on their deposits to a point where the banks were forced to lend as much as possible to replace the money they were losing on the overnight cost of funds. Because of this, they had to lend to people they would normally turn down. Buying a home is the second largest investment one will make (having a child is the first) and one should do ALL the homework before buying a home especially if not a fixed rate mortgage. However, it seems that a small percentage did any research at all. So basically, it is going to suck for homeowners and the home industry for a few years to come. It is about time to accept the truth, the housing market is going to get pretty bad. If you are having a hard time with your mortgage now, you will loose your home in the next couple of years. Rates WILL go back up eventually and so will your payments. Seeing that incomes have gone up only a couple percent on average the past few years, the cost of living and your mortgage will far outgrow your income.

The current administration with the assistance of the FED boasted for several years that they were assisting in"American's achieving their dream of owning a home". Well, this is a big lesson in the concept that just because it is your dream does not mean you should have it come true. It comes down to this, the Government and the FED dropped the rate they paid banks on their deposits to a point where the banks were forced to lend as much as possible to replace the money they were losing on the overnight cost of funds. Because of this, they had to lend to people they would normally turn down. Buying a home is the second largest investment one will make (having a child is the first) and one should do ALL the homework before buying a home especially if not a fixed rate mortgage. However, it seems that a small percentage did any research at all. So basically, it is going to suck for homeowners and the home industry for a few years to come. It is about time to accept the truth, the housing market is going to get pretty bad. If you are having a hard time with your mortgage now, you will loose your home in the next couple of years. Rates WILL go back up eventually and so will your payments. Seeing that incomes have gone up only a couple percent on average the past few years, the cost of living and your mortgage will far outgrow your income.

Dan McGinn is bang on! I've been watching the growing trend towards mega-houses with increasing discomfiture over the last twenty years. Many families were then content with living in houses that averaged 1,000 sq ft or less, as was mine. McGinn could have gone into how much impact such homes are having on the global environment: increased deforestation caused by the huge amounts of lumber that go into such houses, the wasteful amount of water used in the maintenance of lawns and gardens on huge lots, the amount of electricity used to power more and bigger electrical appliances and electronics than could fit in smaller homes, increased amount of energy needed to heat or cool mega-houses, excess fuel consumption caused by hauling materials used to build and equip such houses. and so on. Such housing leaves a huge carbon footprint. What really gets me is that most such houses accommodate only two to four persons. 20 to 30 years ago, many families with more than 4 - 5 children were content to live in 1,000 sq. ft. houses without any ill effects. If status is the driving force behind possession of mega-houses, then their owners lose my and others' respect and esteem, What a poor trade-off!

this article has many fine points ,however a home is tangable wealth you can see it live it and feel it and it makes you feel good.stocks however are a risk that many have taken and have beensent to the curb. Ill take my house thank you

A very high percentage of the foreclosures in this area are due to the predatory lending practices to prospective homebuyers who lacked the essential knowledge of ARMs and loan costs. People who can afford to own a large home should not be ostracized and they are apparently prepared to pay the costs inherent in large homes. As taxes rise, insurance costs increase and utility costs escalate the owners of these homes will reconsider. However at that point few people will be in a position to purchase these
homes for the same reasons.

I have no simpathy. It's simple. If you can't afford it don't buy it! If your not sure if you will be able to afford it, don't buy it! Go ahead let them forclose, I'll buy that house from the bank and rent it back to them!

Call me clueless, but there seems to be something inherently unethical about bundling predatory mortgages and trading on whether people will be able to make their mortgage payments. Where I live in South Carolina, it seems that everything under construction is $200,000 or higher; there are little or no moderately priced homes under construction in our area. Single mothers, minimum wages workers -- the people who serve and clean up after the weatlhy, cannot afford a decent place to live. Apartment rent is more than a mortgage payment for most of these people. Builders who have been building overpriced homes, and mortgage companies that have been grossly overcharging homehowners for mortgages, are getting what they deserve.