I am noticing more and more foreclosures in the Richmond area. From lower priced condos to higher priced houses.
We don’t have the subprime mortgage crisis as in the States where interest rates shot from 0% to more than 5% overnight.
A lot of people can’t afford the sudden increase in mortgage payment and their homes were foreclosed.
Here, our prime rate is still as low as 2.25%.
I couldn’t find any news on the internet about foreclosure rates in Canada.
But not surprisingly, the unemployment rate is 8.5 now. It increased sharply since October 2008. Before that, the unemployment rate remained about 6.5 for several years.
Maybe that’s why. The housing prices are increasing dramatically, people are buying more expensive homes with bigger mortgage payments.
I did read in the news once that instead of the recommended 30% of household income going to housing costs, with the high prices of real estate, 50% or more of household income are going to pay for housing.
Once someone loses their job, how can they pay for the high mortgage payment?
We probably didn’t put away enough savings for times like this because so much of our money are going to housing costs. And we still need to eat. Saving for the raining day seems to be lower on the priority list.