Pain vs. Patience

Over the weekend, I watched an Today show segment that describes available houses for sale around the country that were labeled “real deals” at under $300,000. It struck me that homes less than $300,000 were considered a “deal.” Let me see, a 20% down payment on a $300,000 home is $60,000 for a conventional mortgage loan; leaving a $240,000 mortgage to repay. Hmmm…..

Later on, there was a segment on middle aged children having to move back with their parents because they had lost their jobs and subsequently their home, and had nowhere else to go.

In that story, the parents (the older ones) were thrilled to have “their” family back together – it reminded them of days gone by when their children were young. Over time, however, the house was feeling more cramped with two families squashed inside. The middle aged children remarked that they felt like failures.

As the story went on, it was revealed that the lost home was over 5,000 square feet and the children used to be in the mortgage business and by their own admission, “the money was rolling in.” It’s a story that is being repeated over and over across the United States.

These two stories got me thinking about this current economic crisis and whether we in fact, will actually change our behavior, or are we just waiting out the storm so that we go back to our previous behavior? Once the dark clouds pass, and the money rolls back in, will we go back to 5,000 square feet homes and large mortgage balances? Are we going to learn anything from this mess?

Is it pain or is it just patience?