I watch probably more Patrick Bet-David than I would ever openly admit. Saw this just now while eating lunch:
I believe that video clip is tied to this article, which contends 1 in 37 mortgages are underwater.
Per some Google AI nonsense, apparently there are 84 million active mortgages in America. Nice. If I am doing math correctly, that means maybe 2,270,270 mortgages are underwater. Not great.
I am not a financial expert by any means, nor a mortgage expert. You can take anything I say with a grain of salt, or 1,000 grains of said salt.
It would seem, logically, that the main reason people get underwater on their mortgage — and remember, I said main reason — is the whole Joneses thing. They should buy a house at $350,000. Instead, they buy a house at $700,000, either because they want their kids in a better school district, or they want more space, or they want to be closer to a certain set of friends or parents, or whatever. But they over-buy. And then, if one thing happens that’s a reversal, they are in a bad spot. I know 10–12 couples for whom this happened, in various parts of the United States.
There are also bigger macroeconomic conditions, desirability of market, ability of market to pull in new businesses and new transplants, etc.
But I’d argue the primary reason people go underwater on a mortgage is because they try to keep up with the Joneses, and they step on a rake in the process.
You see this in a ton of other walks of life, obviously. I told this story in another blog just today, but almost anytime you go to a country club and meet a guy with five or six kids whose wife doesn’t work outside the home, you ostensibly just know he is living on credit. I’m actually thinking of a specific person as I type this, and I think he does medical device sales. I suppose you could have 8–10 bang-bang quarters in a row and support six kids and a wife and a country club membership, but goddamn, that is a lot of pressure at the end of the day. What do they say about pressure? It bust pipes. In this specific situation, I’d auger the pipes involve “raising of children” or “quality of marriage,” but everything could also be perfect internally. As for whether he’s living on credit, I’d take that prediction to Vegas.
I live in this infertility vortex right now, and have since about January of 2021. I’ve gradually taught myself to care less, and realize that lots of guys become biological fathers and didn’t “deserve” it and are, in fact, seemingly horrible at it in the eyes of both their wife and their kids and their community. All good. Do you, and I applaud you for having better sperm than me. Honestly.
Infertility is a huge “Joneses” thing too, because you keep coming back to central questions like, why are people even having kids right now?
Because it isn’t easy for you, but you want it to happen, you end up thinking about all this stuff — when for most people, they just do it because “well, that’s what we do at this stage of life!”
Joneses, though.
Obviously the Joneses concept has some potential benefits and perks to society, in terms of driving the housing market and the building of companies and creating a “striving” class somewhere.
I’d argue right now, more people feel “stuck” than “striving,” but I may be reading the room wrong.
The flip side of all this, of course, is that no one knows what exactly “middle class” means anymore, and the upper middle class is its own prison of sorts.
My biggest beef with the Joneses idea is that it leads to a lifestyle where convenience matters more than anything, but especially more than community. We wring our hands often about mental health and the demise of youth, but look at how so many people parent: they ostensibly had kids in the first place to keep up with Joneses (their friends), then they shove their kids in front of advanced tech, then they blame everything else for what their kids do (the schools, the phones, the government), all the while leading a life not rooted in community but rooted in Amazon boxes littering the porch and conspicious modes of consumption. When we replaced “community” with “convenience,” we fucked ourselves mentally. That’s my “Joneses” issue, writ large.
You can also just ignore others and try to live your life, of course, and millions do that pretty well.
What’s your view on keeping up?