Laurie (Lori) Goodman

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40 appearances 1 recordings 1 series first heard May 2021 last heard May 2021

Laurie (Lori) Goodman’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Should You Stretch Your Finances to Buy a Home? · 28 May 2021 podcast

And while I think that there is some truth to that point, you want to be careful about how much you stretch, I think people can stretch a little bit more in this situation of historically low rates.

Obviously, nothing is guaranteed in this life.

But homeownership is the single best way to build wealth.

There is no question that if you buy a home and you lose it, you're worse off than you were before.

However, if you buy a home and you are able to sustain homeownership, you are an order of magnitude better off.

And probabilistically, you're supposed to choose route number two.

So I feel pretty strongly that people are supposed to stretch to buy that home in this period of historically low rates.

I think it's important to bear in mind that the financial crisis was unique.

You had a lot of oversupply going into the financial crisis.

You had a huge amount of overbuilding.

The amount of building way, way surpassed anything we had seen before.

If you look at what's happening now, supply is just extremely limited.

We're building less homes per capita than we were building in the 1960s.

supply is just extremely limited.

And I think that puts a floor on home prices.

And I think that's a sort of a crucial difference.

The second crucial difference between now and the great financial crisis is that lending standards are actually fairly tight in a historical context.

So while you may be willing to stretch more, your bank will put limits on how much you can stretch to get a mortgage.

So chances are very good, if your bank is willing to give you a mortgage, chances are very good that you actually can afford that home or will grow into it very, very quickly.

Thanks very much for having me here today.

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