Paying the Rent After the Pink Slip

(Comstock)

A recent national survey indicates that “[o]ne in three Americans would be unable to make their mortgage or rent payment beyond one month if they lost their job.” Even higher-income households would find themselves in trouble quickly: “Ten percent of survey respondents earning $100K or more a year say they would immediately miss a payment.”
Even more Americans — 61 percent — wouldn’t be able to pay the rent or mortgage after five months of unemployment. Given the current state of the economy, it’s perhaps wise to heed Suze Orman‘s 2008 advice on this blog — she recommended an eight-month emergency savings fund.
This week brought two more bits of housing news which underline what strange times we live in. On Thursday, rates on a 30-year mortgage dropped below 4 percent for the first time ever. And yet, we also learned that the last decade saw the steepest decline in home ownership since the Great Depression. Home ownership dropped to 65.1 percent in April 2010, 1.1 percentage points lower than it was in 2000, and more than 4 percentage points below its peak around 2004, when ownership rates approached 70 percent. That’s the biggest decline since the 1930s, when home ownership plunged 4.2%.
(HT: Naked Capitalism)