If home ownership is so great, why are so many people losing their homes?

Even in times when home values are increasing, people have life-changing events that cause them to have to sell their homes.  Today, many homeowners have owned their homes for a while and have borrowed against the home's value to pay other bills or to make large purchases.  Many others bought their homes near the top of the market, and they are simply not worth what they owe. 

The problem arises when someone has to sell their home today.  Job loss, illness, divorce, or death of one of the income producers all are reasons people can no longer afford to keep their homes.  When you have to sell your home and it's worth less than you paid, you usually end up losing it to the lender or through a short sale.  That's a scary experience, and it will happen to about a million homeowners this year.  It sounds really risky, but there are around a hundred million homes in this country.  Only about 1% of homes will be lost this year due to the owners' economic hardships.

You may quantify your fear by asking yourself if the risk is worth the reward.  With the large percentage of homeowners enjoying their lifestyle and seeing no imminent danger of losing their homes, the odds are pretty good that your lifestyle upgrade will put you among the majority of homeowners who remain secure in their homes. 

Will your home's value fall in the next one, three, or five years?  Maybe it will, and maybe it won't.  Will interest rates change, making a lower priced home actually cost you more?  Maybe they will, and maybe they will not.  Will your life expectancy be reduced in the next year, hour, minute, thereby allowing you less time to enjoy your potential lifestyle upgrade?  Definitely.  That's one to the facts of life.

You see, if you delay firing your landlord for a year, that's another year in the land of the bland.  If you have kids who would enjoy a new home, a secure yard in which to play, a better school to attend, their life at home is well-defined.  When they go off to college, they're gone forever into adulthood.  So, the answer to the question of when is the best time to improve your life is a simple, NOW.