For too many underwater homeowners, however, it was a case of too little, too late. The damage had been done, and financial distress was a reality.
But perhaps some good did come from all this, and recent evidence suggests that members of the younger generation may have learned a valuable lesson "vicariously" from their elders. If so, all was not lost.
Kids of boomers are smarter about housing is subtitled 'Echo boomers still want a home, but only when they're ready:'
"Here’s a benefit of the housing bust: It has created a generation of young Americans who are more knowledgeable about homeownership than their baby boomer parents were at their age.
At least that’s what the kids think.
Those between the ages of 18 and 35 still want to own a home, and view homeownership as an indicator of success, according to a survey released Monday by Better Homes and Gardens Real Estate. But they’ll buy only when they’re sure they’re ready for the responsibility—a sign of maturity from a group that often is stereotyped as being fiscally irresponsible and maintaining a less-than-stellar work ethic.
Moreover, 69% of the 1,001 18- to 35-year-olds surveyed also said the recent housing downturn has made them more knowledgeable about owning a home than their parents were at their age, the results found. And 77% think they’ve gained much of this knowledge because of the large amount of media coverage about the real-estate industry over the past six years.
“They’re not going to end up getting into a situation that they’ve seen… where they can’t keep the house” because they can no longer afford it, said Matt Rand, managing partner of Better Homes and Gardens Rand Realty, a brokerage of Better Homes and Gardens Real Estate based in New York and New Jersey.
Still, this survey suggests they haven’t given up on homeownership—even though other statistics and stories indicate people this age group would rather remain renters, he said.
While favorable home prices and low mortgage rates are tempting, people in this age group also are not going to buy until they’re ready for the responsibility, according to the survey. Sixty-nine percent said they will buy not only when can they afford it, but also when owning won’t disrupt their lifestyles. . . .
The survey also found that 75% of people in this age group think that owning a nice home is a key indicator of success, more so than taking extravagant vacations, owning an expensive car or having designer clothes. Forty percent said they’d take on a second job to save for a home and 23% said they’d move in with their parents to make it happen.
Members of “Gen Y are living at home with their parents, but this [survey] suggests they’re being strategic in living at home—not because they’re slacking,” Rand said."
The absolute best way, albeit neither often nor effectively used, to learn from experience is to learn from the experience of others.
And the idea that housing prices always go only one way --- up --- and that housing is a safe can't miss investment has been shattered and hopefully for good.
In addition, the idea that borrowing money to the hilt and depending on home price appreciation to make a profit has been shattered as well.
Nothing is a sure thing, and that's for sure. And government programs which encourage people to buy homes that they can't afford do not end up helping the people the programs are designed to help.
If Generation Y has in fact internalized all the aforementioned lessons vicariously, some good did indeed come from the recent housing fiasco. Some, but not much.
We'll be living with the housing bubble and borrowing to the hilt's aftermath for a very long time to come.