America, it’s time to wake up and face a difficult financial fact: Our houses are killing us.
We’re blessed to live in the Land of the Big. The wide expanses of open land across this country give us plenty of room to stretch out. America is the nation of big cars, big personalities, and increasingly bigger people. And meals aren’t the only things that we’re super-sizing: in the last 50 years, we’ve massively increased the size of our homes too. But is that a good thing?
Ask any nutritionist, and they’ll tell you that super-sized meals turn us into super-sized people, and that’s a problem. When we make a habit of eating more than we ought, we slowly kill ourselves from the inside out. And unfortunately, the same thing is happening with housing. As a country, we’ve developed an appetite for big, fancy houses that come with big mortgages. And it’s crippling us financially.
Let’s look at some numbers to get a handle on how big this problem is. According to research done by MSN Real Estate, the size of the average new home in America has grown by more than 140% in the last 60 years or so. In 1950, the average new home in America was 938 square feet, which would be considered tiny by today’s standards. By 2004, that figure had grown to 2,349 square feet. During that same period in time, the balance of the average American mortgage has skyrocketed, to over $200,000.
How do you explain the massive growth of our home size? We don’t need bigger homes because we have bigger families — the average size of the American family has actually fallen significantly since the 1950s. And we’re not building bigger homes because we have bigger spaces to work on — the size of real estate lots has steadily decreased over time, and there’s less available space for home building than ever before.
We’re left with only one conclusion: Our homes have exploded in size because we’ve become obsessed with having big houses. Let’s face it: The family home has become the greatest single status symbol in America today. We judge people’s wealth and success based on the homes that they have. Someone who lives in a sprawling home with a three-car garage and granite counter tops must be successful and important, we surmise. On the other hand, a family of four living in a modest three-bedroom home must not be doing too well.
In my opinion, our national love affair with big homes has turned dangerous. We have become so fixated on home size that many of us ignore other important elements of wisdom and financial planning in order to get into the biggest, best homes that we possibly can. We stretch our budgets too thin; we neglect our retirement savings; we fail to tithe and give generously; we run up massive debts. We’re becoming a nation of house-poor people. We’re spending so much money on mortgage payments for our super-sized homes that we can’t afford anything else.
I don’t have anything against large homes, necessarily. What I have a problem with is the place that they’ve taken in our society. Our obsession with big homes is killing us. People routinely make bad financial decisions to get into bigger houses, so that other people will see how “successful” they are. We let our homes determine our identities. Too many people strive to live in a big, nice home because of what it says about them. They have a large, beautiful house, so they must be doing well in life. Never mind the fact that they can’t really afford it.
Here’s a good rule of thumb: In order to afford a big home, you have to have a big income. That sounds like common sense, and yet people ignore it all the time. We buy houses that we can’t afford, hoping that our incomes will grow over time and that one day we’ll be able to pay for them. We buy big houses that will require two incomes throughout our entire lives, forcing many families to make difficult trade-offs with childcare and family planning.
In this series of articles, we’ve been talking about the best ways to plan financially for home purchases, and the best kind of mortgages to use. You should save a 20% down payment when you buy a home, use fixed-rate mortgages, borrow on 15-year terms, and keep your monthly payments to around 25%-35% of your take-home pay. If you follow these rules, you’re not going buy the biggest house possible. And that’s okay, because you’ll be in a rock-solid position financially instead of beings stressed about your budget.
If we’re committed to handling our money in the most trustworthy and responsible way possible, we need to break ourselves of the lust of big homes. The fact is that your family’s health and happiness is not based on the real estate that you own, but the way that you relate to each other. And having a big house doesn’t make you successful. Remember, God’s master plan for your money is all about providing for your family, tithing to support your church, giving generously and creating an inheritance for the future. You should measure your success according to His priorities, not the size of your home.
If you successfully make this transition in your heart and mind, you’re going to start looking at houses differently. The people around you may never understand why you live in a smaller home than you could afford. But it really doesn’t matter. The important thing is not what they think about your decisions, but what your decisions do for you.
Instead of being a slave to your house, take the bold step to be the master of your money.
Photo by Steve Tulk. Used under Creative Commons License.