scaredycat, I’m with svelte. I will go so far as to say I am a home owner with a 30 year fixed. My mortgage payments can’t go up. Rent, in run away inflation, will. I’m more afraid of rising rent than I am of declining home prices. Really, choose your poison. I anticipate the bottom for real estate in real terms is a ways off, but in nominal terms, who knows. Even Bill Maher is reporting that Chinese tourists are buying real estate in America now. How can we repay the years and years of trade debt if we don’t export anything to them? Well, they can just come over, trade all those extra dollars they are holding for something that we can’t export (our land), then someday we may be paying skyrocketing rent to Chinese landlords. Maybe that’s a doomsday scenario that won’t play out, but I don’t personally want to risk it.

The other answer is, as Rich, and Peter Schiff, and many many other smart people who correctly identified the housing bubble and crash are saying, is to buy gold as a store of “savings”. Arguably a speculative move, hoping that as people lose faith in paper money they will regain faith in metal money. One arbitrary convention for another. If gold really takes off and housing continues to slump (especially if interest rates spike), who knows, you may be able to pay cash for something someday and not care what mortgage rates are. I think trying to time that would require spectacular luck, and I personally don’t have that kind of chutzpah.

All I can recommend is do what will help you sleep at night…