Are we too dependent upon housing?

The American dream is to have a nice home, but haven't we gone overboard on housing at the expense of security? For many a house is their major, perhaps only investment, and I say that is not good planning.

Now that we are seeing the major lenders in trouble becasue of questionable housing loans, I think my fears of a few decades are coming true. I bought my first home in the Dallas area after getting out of the service in 1967 and house prices were escalating at a fast clip. One could by a 1600 sq. ft. house for less than 20k and a few years later take a nice equity and parlay it into a bigger and more expensive house.

That worked for a long time but now the gravy train is coming to a halt. Young people are buying in over their heads in hopes their incomes will grow into their house payments and life will be more comfy in a few years. It works for some, but when you see the hundreds of nice homes on the market in the greater Dallas metroplex that should tell you something. Many of these homes are either HUD properties or are being offered by realtors and traders who take them off the hands of desperate people who no longer can afford the payments.

At one time a 1600 sq. ft. home was a mansion for those of us that grew up stacked three to a bed, but now a starter home of less than 2000 sq. ft. just isn't good enough. We had the same problem with cars in that a little sedan wasn't good enough, until gas prices told us differently. It also happens that the utilities on a large home are much more than on a small one, so maybe there is a practical size for a given sized family? That to me should be a major factor in buying a home and in lending for one.

I played the home equity game and then lost the equity in a divorce settlement, and I said "no more". Now I live in a nice old home that has long been paid for and my wife and I try to find conservative investments for our spare cash. We are still putting money into this old house and it's design was influenced by Frand Lloyd Wright, so I doubt we could replace it for any less that twice what we have in it. But we don't have payments and we have the staying power to stay in the home. Our social security and investment income is more than enough to keep us.

I just wish younger people could plan ahead and could put their eggs in more than one basket. If that were the case the greedy lenders on Wall Street would have to find some other reason to put our economy in jeapordy.