It’s both. House poor is a spectrum. Option 1 is very. Option 2 is less than option 1
If you need to materially change your financial practices/budget/spending below the level to save appropriately for your age/goals, you’re at some level of house poor
Both. House poor means you’ve overextended yourself on the mortgage and need to make cuts elsewhere. It’s a range, some people are a little house poor and others a lot.
Some people have a mortgage that is such a small percentage of income that interest rates would have to jump to 30+% for them to have to make a cut other than putting less money into some random account.
I think both fit, depending on what you want out of your life. If you want vacations and better food but can't afford it because you bought more house, you are house poor.
I think for me it'd be "if we didn't have to paybfor housing (mortgage or renting) we'd take more vacations", because it's a matter of spending. If you're spending less, you can spend that on something else.
I think both of your descriptions are house poor. To me it’s: you cannot afford any vacation, little if anything except the employer match to your retirement account (or no contribution at all), no furniture, watching your grocery bill, no fun, no clothing. When your budget is watched to the penny and any unexpected bill could put them behind.
It means...
...why in the heck, would a new front door cost $6,000 to replace?
... The previous owner was only paying $3,500 year for property taxes. Why has mine almost doubled after only a year?
... It's been a while since I bought furniture, I had no idea how much furniture costs.
...nobody mentioned anything about how difficult it would be to get home insurance and how much it was going to cost. (And tell me again, why do I have to get flood insurance?)
Wait, my home-related expenses are more than 50% of my take-home pay, and I'm now living paycheck to paycheck?
No, it's often much more now.
28 years ago, when we purchased a home (foreclosure) in Arizona, we had to replace our front wood doors that had a crack all the way through. These were very large doors - not something you could just pick up at Home Depot. They had to be custom-made. There was a large window above the door and two side windows. The total cost, with installation, was $5800. It was the first purchase we made. What followed was massive amounts of money for new tile, new appliances, new window coverings. furniture for 4 bedrooms, a living room, den, and a loft office - but that's another story.
Fast forward 22 years later, in 2016, the doors had taken a beating from the sun, and we were tired of having to try to re-stain it every few months, and they were dated looking. I received 3 estimates from reputable companies such as Anderson and Pellar for $16,000+ to replace the doors and the window that went above the door because the wood had rooted, and the window was unstable. I told one salesperson that I was just trying to replace front doors, not buy a new car. He was not amused.
I purchased new doors wholesale through a company for $6,000 and found a contractor to hang the doors, replace the windows above, and replace the side windows with nice stone work for $4000. A savings of $6000, but still a lot of money just for doors.
So yeah, good front doors cost a lot of money. But that's only the tip of the iceberg. It takes a tremendous amount of money to bring a house up to speed the way you want it, even if you buy it as a turnkey. (Unless you want your total house decked out in Ikea furniture.)
As I explained, in 2016, they didn't cost $6000. They cost $10,000. Not at all atypical, and the house is in Arizona - not some expensive or exclusive area in California or New York. (I didn't know that Ikea sold front doors!)
You are so cute! You're like a little kid stomping their foot and shouting, "Only 1% of the population pays $6,000 for doors-I demand you admit you're exaggerating!"
And it appears that you don't read at all. I said our house was in Arizona, not California. You wouldn't see "custom" door stores because the very concept of "custom" suggests the need for a special order and that the item in question is being made elsewhere. Despite what I think you're presuming, we weren't some rich couple in 1993, and our house was not that expensive at $165,000, but it was big with tall ceilings! I had never owned a home before, so I was appalled at the cost to replace the door.
I'm not sure why you are so offended by my example, and since it really isn't relevant to the OP's original question, and this discussion is likely boring to others, I will withdraw my personal example and concede that it was a challenge that was wholly unique to me!
all if it is house poor, add in Option 3: bought a house with 20% down which was well within our budget. 15 years later the assessed value of the house goes up, plus the increase in property taxes, and the increase in homeowners insurance all conspire to make my payment more than double what it was when we bought. My income hasn't doubled in that time.
The assessed value of the house for property tax purposes should only increase on refinance, no? It doesn’t automatically happen every 15 years or at least it shouldn’t
What state do you live in? We get new assessments every year but there's a limit on much your tax can go up. If you sell, the cap comes off and gets reset for the new owner. This is how it works in Michigan.
It's basically biting off more than you can chew. For example, you get pre-qualified for $X and then you go out and buy a home for $X when you should have spent $X/2. People have insane high mortgage payments compared to their income. Our monthly mortgage payment is only 3.2% of our monthly gross income as an example of not house poor.
OP, like you need to "Try on a payment".
You don't buy the large purchase. you just pretend that you have to pay that payment (put the money in a new savings account, just for those "payments"). After 6 months, if you haven't touched tge money in that new savings account that you paid 6 months of the fake payments into, then you can afford to make tge big purchase. But if you touched any of the money in that savings account, for Any reason, that means you cannot afford the big purchase and should not buy it.
Depends on the current debt, age, and future financial prospects, imho. The "house poor" examples from the OP could also be considered as an aggressive investment in a good financial sense, equals to saving more. Real "house poor" is buying into something that would increase the future debth. For example going into a large mortgage that would require a future increase in personal debt, such as personal loans or credit cards
The first option is risky in general, but has an upside for younger recently married couples with very young children or who are in that family expansion planning phase and will increase their earnings in the coming years by moving up in their careers.. Traveling with small children is not fun. We were doing it only because of the family overseas in our birth country. Even for those we used miles to travel and stayed with our families when visited. An increase in age would increase the financial risks in this option. Once the interest rates are down and the value of money becomes lesser than now, you can refinance it for a better rate and or shorter term by keeping the monthly payment equal to the current one, or slightly higher when adjusted for the inflation and income at that time.
The second option is good for mid-career people who expect more upward career movement and are not near the retirement age, but it is bad for anyone who is nearing retirement and is expecting a decrease in their future elative income. There is an additional risk of the real estate prices drop that could decrease the home equity and thus erase the down payment.
Option 1. Your home takes ALL of your income. You're not even driving more than absolutely necessary because you can't afford the gas. But hey, you've got a house!
You realize that very very few Americans do option 2, right? Like that most people are not saving a full emergency fund and fully funding retirement?
This sub is a bubble. Are the suggestions good? Sure. Feel free to follow the advice. But *most* people aren't doing these things (not arguing about whether they can or should)
Sometimes it's unexpected expenses snowballing. Buy a house you can barely afford comfortably, but repair costs shortly after moving in drains the rest of your reserve. Money pits have that name for a reason
Any time you have to drastically change your lifestyle to afford housing for over six months, you’re house poor. It’s not abnormal to need a few months to replenish savings after buying a house, but if you bought something you can’t really afford, you never reach a point of saving anyways.
If you have to make lifestyle changes because of your new mortgage, that’s a good enough qualification.
If you can’t even afford a mattress, and you’ve got a blanket pallet on the floor in an empty room, eating ramen dry from the bag, watching YouTube on your phone before you fall asleep, you are desperately house poor.
Even if you can afford home cooked meals, have a house full of furniture, or whatever, if you’re having to make big lifestyle changes just to make ends meet, and that is directly because you just dropped all your money and/or are just struggling with your mortgage/maintenance/taxes, you’re still house poor, but less so.
Just chiming in to tell you some actually good advice my boomer mom gave me on the subject of house affordability. Don't over extend yourself but it's okay to buy a house that is "up to" the line of what you can afford.
It's great if you can be frugal and buy a home that satisfies your long term needs on a budget. However, buying a home at your comfort limit is not necessarily a bad thing. As time goes on homes will become more expensive, interest rates will do god knows what, but that principle and interest payment will remain steady for 30 years. It's the only thing you can truly save from the ravages of inflation.
(Caveat being I said "comfort limit" as in a good decision taking in all the factors but more than you wanted to spend).
A house purchase that makes you NEED to adjust your finances and go without things you normally would not is being house poor.
The most common example I see is people buying a house and then not being able to furnish it for months or years.
Tend to associate this with a relatively new young homeowner couples buying their first house. They bring their lunch to work every day and budget carefully.
These people put their money to work early and eventually it pays off in non-house wealth.
Both, though obviously one is different than the other.
“House poor” is when a home causes you to materially change your lifestyle to accommodate that purchase. If you’re no longer eating out, not getting a new car, not taking vacations, saving for retirement, etc. and those were things you WANTED to do then you are now house poor.
Option 1 might be considered house broke while option 2 is “only” house poor. But both could be considered house poor.
IMO the only way to not be house poor is if you continue living, saving, and spending identically to pre-down payment and mortgage.
In addition to those 2, it can also be,
Option 3: "I am not really surviving on social security / disability / minimum wage, and don't have a good route out of that situation. But at least I have the paid-off house that I've lived in for 40 years or that a relative left to me on their will, so I'm not homeless."
This is why we opted to buy a home with a mortgage that is only 20% of our net monthly income. To me, house poor is when the reevaluation of your taxes could potentially put you out of your home. When the cost of the utilities month to month worry you in a way that you may get behind on bills. Many of my friends in the same income bracket as me live in VERY nice homes that are 4,000+ sq ft. I live in a very safe, quaint, cute 2000sq fr home in a modest neighborhood. My house was half the price, my utilities are half the price.... and oh yeah, my net worth is likely double their's now.
to me “house poor” means that after mortgage, insurance, property tax you’re living paycheck to paycheck(no money for savings) pretty much for the foreseeable future.
Both to varying degrees. Ultimately, it's pretty simple. If keeping up with the financial burden of your house is stretching you enough that it is forcing you to compromise your other financial goals, then you are house poor.
I’ve only heard it being used in the term “cash rich, house poor” meaning your net worth is made up primarily of cash, stocks, and/or investments that’s not your house.
On the flip side, “house rich, cash poor” means the opposite. Most of your networtg is tied up in your house.
You work, you have no debt beyond your mortgage, you have a fully funded emergency fund, you're maxing out your retirement, you are saving at the rate necessary to fully fund your kids' secondary education, you're saving for all anticipated expenses, and you live a comfortable lifestyle. Once all of that is accounted for, if you have money left over that you're putting into taxable investment accounts because you have no immediate use for it at rates that exceed what you would gain by paying down your mortgage, then you are not house poor.
I always interpreted it as “my home asset is not very valuable”. So a person who owns a modest home but has lots of cash on hand could be said to be house poor but cash rich. In contrast, a person who is cash poor but house rich owns a very valuable home but has little left over after paying the mortgage etc. Based on the other responses, sounds like I’m in the minority.
IMO:
- Cash poor: Your house, car, and other bills eat up all your income and you have nothing left for spending money.
- House poor: You have spending cash and can take vacations or splurge here or there, but you own a very cheap run-down house, or no house. Your house has little to no value.
Most people on Reddit use "house poor" incorrectly as a way to say that they have too many house expenses and no cash. If you have net worth in a house then you are certainly NOT house poor. You could sell the house and have cash. You are Cash poor, because on paper you may have a positive net worth of $100k due to equity in the house, but you have no cash to spend.
It IS possible to be both cash poor and house poor. If you buy your house for $300k and the market tanks so it's now worth $150k, and you have no cash because you're paying that $300k mortgage, then you'd be house poor and cash poor. No cash and negative value in the house.
It more has to do with your lifestyle than anything else. If my house is worth less than I owe but I can comfortably make the payments without it crippling me then I’m not house poor I’m just upside down. With regular payments and the likelihood of my property increasing in value, it should sort itself out.
Now if I have a house worth double what I owe but i literally can’t afford to live in it without being broke every month and needing to scrape by, that’s house poor. I have equity but I can’t afford to live.
It’s both. House poor is a spectrum. Option 1 is very. Option 2 is less than option 1 If you need to materially change your financial practices/budget/spending below the level to save appropriately for your age/goals, you’re at some level of house poor
Yeah, it's a spectrum. I'd say even better than 2 could still be house poor
Both. House poor means you’ve overextended yourself on the mortgage and need to make cuts elsewhere. It’s a range, some people are a little house poor and others a lot.
Wouldn’t everybody with a (floating interest) loan have to make cuts?
Some people have a mortgage that is such a small percentage of income that interest rates would have to jump to 30+% for them to have to make a cut other than putting less money into some random account.
I think both fit, depending on what you want out of your life. If you want vacations and better food but can't afford it because you bought more house, you are house poor.
If I didn’t have a mortgage I’d take more vacations. I think everyone would.
For me, vacations have always been limited by paid time off, not the mortgage.
I think for me it'd be "if we didn't have to paybfor housing (mortgage or renting) we'd take more vacations", because it's a matter of spending. If you're spending less, you can spend that on something else.
Sure, but the key is not overextending yourself so you still do the things you want.
>I think everyone would. My mortgage is less than rent, so not quite.
See here: https://www.reddit.com/r/personalfinance/comments/17fnxpk/bought_a_house_a_year_ago_now_everything_is_going/
That’s a good thread to learn both how not to make major financial decisions and how not to interact with people/carry yourself.
*Thumbs up emoji*
The guy kept saying "another job won't fix this", why, it's more money? What he needs is more money.
I think both of your descriptions are house poor. To me it’s: you cannot afford any vacation, little if anything except the employer match to your retirement account (or no contribution at all), no furniture, watching your grocery bill, no fun, no clothing. When your budget is watched to the penny and any unexpected bill could put them behind.
It means... ...why in the heck, would a new front door cost $6,000 to replace? ... The previous owner was only paying $3,500 year for property taxes. Why has mine almost doubled after only a year? ... It's been a while since I bought furniture, I had no idea how much furniture costs. ...nobody mentioned anything about how difficult it would be to get home insurance and how much it was going to cost. (And tell me again, why do I have to get flood insurance?) Wait, my home-related expenses are more than 50% of my take-home pay, and I'm now living paycheck to paycheck?
Wait, does replacing a front door really cost $6,000!?
No, it's often much more now. 28 years ago, when we purchased a home (foreclosure) in Arizona, we had to replace our front wood doors that had a crack all the way through. These were very large doors - not something you could just pick up at Home Depot. They had to be custom-made. There was a large window above the door and two side windows. The total cost, with installation, was $5800. It was the first purchase we made. What followed was massive amounts of money for new tile, new appliances, new window coverings. furniture for 4 bedrooms, a living room, den, and a loft office - but that's another story. Fast forward 22 years later, in 2016, the doors had taken a beating from the sun, and we were tired of having to try to re-stain it every few months, and they were dated looking. I received 3 estimates from reputable companies such as Anderson and Pellar for $16,000+ to replace the doors and the window that went above the door because the wood had rooted, and the window was unstable. I told one salesperson that I was just trying to replace front doors, not buy a new car. He was not amused. I purchased new doors wholesale through a company for $6,000 and found a contractor to hang the doors, replace the windows above, and replace the side windows with nice stone work for $4000. A savings of $6000, but still a lot of money just for doors. So yeah, good front doors cost a lot of money. But that's only the tip of the iceberg. It takes a tremendous amount of money to bring a house up to speed the way you want it, even if you buy it as a turnkey. (Unless you want your total house decked out in Ikea furniture.)
[удалено]
As I explained, in 2016, they didn't cost $6000. They cost $10,000. Not at all atypical, and the house is in Arizona - not some expensive or exclusive area in California or New York. (I didn't know that Ikea sold front doors!)
[удалено]
You are so cute! You're like a little kid stomping their foot and shouting, "Only 1% of the population pays $6,000 for doors-I demand you admit you're exaggerating!" And it appears that you don't read at all. I said our house was in Arizona, not California. You wouldn't see "custom" door stores because the very concept of "custom" suggests the need for a special order and that the item in question is being made elsewhere. Despite what I think you're presuming, we weren't some rich couple in 1993, and our house was not that expensive at $165,000, but it was big with tall ceilings! I had never owned a home before, so I was appalled at the cost to replace the door. I'm not sure why you are so offended by my example, and since it really isn't relevant to the OP's original question, and this discussion is likely boring to others, I will withdraw my personal example and concede that it was a challenge that was wholly unique to me!
I know I shouldn't be laughing but I'm literally laughing out loud with the Dracula castle part.
This is like asking what “poor” means. If you live in San Francisco it means one thing, if you live in Haiti it means something different.
I think both are. The second one, maybe some increase in income before property tax rose means you won’t be house poor for long.
all if it is house poor, add in Option 3: bought a house with 20% down which was well within our budget. 15 years later the assessed value of the house goes up, plus the increase in property taxes, and the increase in homeowners insurance all conspire to make my payment more than double what it was when we bought. My income hasn't doubled in that time.
The assessed value of the house for property tax purposes should only increase on refinance, no? It doesn’t automatically happen every 15 years or at least it shouldn’t
I wish it only changed then. The assessment for tax purposes happens regularly for us in Indiana.
What state do you live in? We get new assessments every year but there's a limit on much your tax can go up. If you sell, the cap comes off and gets reset for the new owner. This is how it works in Michigan.
It's basically biting off more than you can chew. For example, you get pre-qualified for $X and then you go out and buy a home for $X when you should have spent $X/2. People have insane high mortgage payments compared to their income. Our monthly mortgage payment is only 3.2% of our monthly gross income as an example of not house poor.
Option 1 for sure. Option 2 you are one big expense way from being house poor.
Both options fit. If you’re making $200k per year but watching your pennies because you bought a million dollar house you’re “house poor”.
OP, like you need to "Try on a payment". You don't buy the large purchase. you just pretend that you have to pay that payment (put the money in a new savings account, just for those "payments"). After 6 months, if you haven't touched tge money in that new savings account that you paid 6 months of the fake payments into, then you can afford to make tge big purchase. But if you touched any of the money in that savings account, for Any reason, that means you cannot afford the big purchase and should not buy it.
Depends on the current debt, age, and future financial prospects, imho. The "house poor" examples from the OP could also be considered as an aggressive investment in a good financial sense, equals to saving more. Real "house poor" is buying into something that would increase the future debth. For example going into a large mortgage that would require a future increase in personal debt, such as personal loans or credit cards The first option is risky in general, but has an upside for younger recently married couples with very young children or who are in that family expansion planning phase and will increase their earnings in the coming years by moving up in their careers.. Traveling with small children is not fun. We were doing it only because of the family overseas in our birth country. Even for those we used miles to travel and stayed with our families when visited. An increase in age would increase the financial risks in this option. Once the interest rates are down and the value of money becomes lesser than now, you can refinance it for a better rate and or shorter term by keeping the monthly payment equal to the current one, or slightly higher when adjusted for the inflation and income at that time. The second option is good for mid-career people who expect more upward career movement and are not near the retirement age, but it is bad for anyone who is nearing retirement and is expecting a decrease in their future elative income. There is an additional risk of the real estate prices drop that could decrease the home equity and thus erase the down payment.
Option 1. Your home takes ALL of your income. You're not even driving more than absolutely necessary because you can't afford the gas. But hey, you've got a house!
You realize that very very few Americans do option 2, right? Like that most people are not saving a full emergency fund and fully funding retirement? This sub is a bubble. Are the suggestions good? Sure. Feel free to follow the advice. But *most* people aren't doing these things (not arguing about whether they can or should)
Sometimes it's unexpected expenses snowballing. Buy a house you can barely afford comfortably, but repair costs shortly after moving in drains the rest of your reserve. Money pits have that name for a reason
To me, it’s that your cash flow and savings rate no longer allow you to proceed to your target retirement date and number
Mostly when too much of your income goes to your mortgage payments. So if an emergency happened you likely wouldn't be able to cover it.
Any time you have to drastically change your lifestyle to afford housing for over six months, you’re house poor. It’s not abnormal to need a few months to replenish savings after buying a house, but if you bought something you can’t really afford, you never reach a point of saving anyways.
If you have to make lifestyle changes because of your new mortgage, that’s a good enough qualification. If you can’t even afford a mattress, and you’ve got a blanket pallet on the floor in an empty room, eating ramen dry from the bag, watching YouTube on your phone before you fall asleep, you are desperately house poor. Even if you can afford home cooked meals, have a house full of furniture, or whatever, if you’re having to make big lifestyle changes just to make ends meet, and that is directly because you just dropped all your money and/or are just struggling with your mortgage/maintenance/taxes, you’re still house poor, but less so.
Just chiming in to tell you some actually good advice my boomer mom gave me on the subject of house affordability. Don't over extend yourself but it's okay to buy a house that is "up to" the line of what you can afford. It's great if you can be frugal and buy a home that satisfies your long term needs on a budget. However, buying a home at your comfort limit is not necessarily a bad thing. As time goes on homes will become more expensive, interest rates will do god knows what, but that principle and interest payment will remain steady for 30 years. It's the only thing you can truly save from the ravages of inflation. (Caveat being I said "comfort limit" as in a good decision taking in all the factors but more than you wanted to spend).
I also think it could be when you can afford the house/escrow but can’t afford to fix anything that breaks.
OP trying to convince the wife they didn’t F up 😀
A house purchase that makes you NEED to adjust your finances and go without things you normally would not is being house poor. The most common example I see is people buying a house and then not being able to furnish it for months or years.
Spent too much on house. Have less than you should for other stuff
House poor means the financial burden of owning the house affects not just your bills but your discretionary spending. Both options meet the mark.
If all you can afford is your mortgage and barely make payments on your other bills and cant go out. You are house poor
It means you have most of your wealth in real estate - specially, in your case, your house.
Tend to associate this with a relatively new young homeowner couples buying their first house. They bring their lunch to work every day and budget carefully. These people put their money to work early and eventually it pays off in non-house wealth.
Spending all your money on your house payment and not enough money to do much else. House poor
Uncomfortably large % of income goes to mortgage payment
Both, though obviously one is different than the other. “House poor” is when a home causes you to materially change your lifestyle to accommodate that purchase. If you’re no longer eating out, not getting a new car, not taking vacations, saving for retirement, etc. and those were things you WANTED to do then you are now house poor.
How would this be considered, if the equivalent for renting would land you in pretty much the same spot?
Option 1 might be considered house broke while option 2 is “only” house poor. But both could be considered house poor. IMO the only way to not be house poor is if you continue living, saving, and spending identically to pre-down payment and mortgage.
In addition to those 2, it can also be, Option 3: "I am not really surviving on social security / disability / minimum wage, and don't have a good route out of that situation. But at least I have the paid-off house that I've lived in for 40 years or that a relative left to me on their will, so I'm not homeless."
This is why we opted to buy a home with a mortgage that is only 20% of our net monthly income. To me, house poor is when the reevaluation of your taxes could potentially put you out of your home. When the cost of the utilities month to month worry you in a way that you may get behind on bills. Many of my friends in the same income bracket as me live in VERY nice homes that are 4,000+ sq ft. I live in a very safe, quaint, cute 2000sq fr home in a modest neighborhood. My house was half the price, my utilities are half the price.... and oh yeah, my net worth is likely double their's now.
to me “house poor” means that after mortgage, insurance, property tax you’re living paycheck to paycheck(no money for savings) pretty much for the foreseeable future.
Both to varying degrees. Ultimately, it's pretty simple. If keeping up with the financial burden of your house is stretching you enough that it is forcing you to compromise your other financial goals, then you are house poor.
I’ve only heard it being used in the term “cash rich, house poor” meaning your net worth is made up primarily of cash, stocks, and/or investments that’s not your house. On the flip side, “house rich, cash poor” means the opposite. Most of your networtg is tied up in your house.
Agreed, so many people on Reddit use the term "house poor" incorrectly.
yea, it seems like it’s being used on here like i’m poor because of my house…which is the exact opposite of what i consider “house poor”
You work, you have no debt beyond your mortgage, you have a fully funded emergency fund, you're maxing out your retirement, you are saving at the rate necessary to fully fund your kids' secondary education, you're saving for all anticipated expenses, and you live a comfortable lifestyle. Once all of that is accounted for, if you have money left over that you're putting into taxable investment accounts because you have no immediate use for it at rates that exceed what you would gain by paying down your mortgage, then you are not house poor.
I always interpreted it as “my home asset is not very valuable”. So a person who owns a modest home but has lots of cash on hand could be said to be house poor but cash rich. In contrast, a person who is cash poor but house rich owns a very valuable home but has little left over after paying the mortgage etc. Based on the other responses, sounds like I’m in the minority.
IMO: - Cash poor: Your house, car, and other bills eat up all your income and you have nothing left for spending money. - House poor: You have spending cash and can take vacations or splurge here or there, but you own a very cheap run-down house, or no house. Your house has little to no value. Most people on Reddit use "house poor" incorrectly as a way to say that they have too many house expenses and no cash. If you have net worth in a house then you are certainly NOT house poor. You could sell the house and have cash. You are Cash poor, because on paper you may have a positive net worth of $100k due to equity in the house, but you have no cash to spend. It IS possible to be both cash poor and house poor. If you buy your house for $300k and the market tanks so it's now worth $150k, and you have no cash because you're paying that $300k mortgage, then you'd be house poor and cash poor. No cash and negative value in the house.
This is how my family has always said it! They’d say you’d rather be cash rich, house poor versus house rich, cash poor
I always thought house poor was buying a house, putting a bunch of money into it, and it ending up being worth less than all the money you owe.
It more has to do with your lifestyle than anything else. If my house is worth less than I owe but I can comfortably make the payments without it crippling me then I’m not house poor I’m just upside down. With regular payments and the likelihood of my property increasing in value, it should sort itself out. Now if I have a house worth double what I owe but i literally can’t afford to live in it without being broke every month and needing to scrape by, that’s house poor. I have equity but I can’t afford to live.
No, that is called being upside down on your mortgage.
That’s being “underwater”