Yes, people do consider it. People like me. I bought my house in Carlsbad in ’93 and paid 185K (no HOA, no Mello Roos). It’s been totally remodeled by my crafty husband throughout the years. We now have 3 children and I would LOVE to buy a bigger house. Obviously we have a ton of equity in our home and could afford a step up in the area. But I will never, ever throw all of that $$ down the drain in property taxes, HOA, and Mello Roos. The increase in those payments alone would be more than our existing mortgage! We won’t even consider moving with the home prices today and the resulting property taxes we’d have to pay for the rest of our lives. It’s just not worth it. In the next few years we’ll either add on to the house or continue to watch the market to see if houses get anywhere near back to reasonable where a move would make sense. And even then, there’s no way I’ll pay some of the outrageous HOA and Mello Roos fees. I’d consider paying a reasonable HOA if it offered something in return. Mellos Roos, hopefully you can catch the property after the previous owners have already paid it off or close to it.

And yes, I too laugh at the people who say, “I made xxxK on my house”. They never mention how much money they paid into it or the costs involved with buying and selling a home and moving. I’m not under any delusion that remodeling our house cost money (though we have saved a bundle doing it all ourselves but that takes patience and hard work). And I’m well aware of all of the interest we have paid throughout the years (I have a spreadsheet that shows the exact figure). But we make extra payments towards the principal of our loan every month and it will be totally paid off in 2009.

I think a lot of people are only concerned with the monthly payments because quite frankly, that’s how they live: month to month, paycheck to paycheck. And that’s why these same people won’t be able to handle it when their monthly payments increase on their ARM’s.