Forget long term financing. I know of several people who got an ARM, and are refinancing (and they do it every 2-3 years) into another arm … so far, other than the 3-5% it tacks on to the amount its worked out fine cos interest rates have only risen slightly since 02. I cant wait for the great printing press to start humming and send interest rates into the mid teens.
Again, only thinking how much a month. Stupid.
Cool.
Cow_tipping.

i was always raised believing that a house is the “best investment” and that renting is “throwing money away” or that you’re “just paying the mortgage for the landlord who is getting rich off of the renter”….

when you look at today’s prices however, you have to adjust your thinking.

when i talk to neighbors who tell me they have 10 year interest only loans…I think “you aren’t a homeowner” you are a renter just like me, only you rent with additional costs like HOAs and propety taxes. Plus I can pick up and leave if i want..and you have to pay a realtor 6% to sell your house…

in most so cal markets, I bet it is substantially cheaper to rent. the excess money you save can be spent on toys and increase your lifestyle…or you can do the smarter thing and save/invest it…and effetively live in that same nice house, with a smaller monthly payment, and have a diverse investment portfolio…

there will come a time to buy houses….when the cost to buy is similar to the cost to rent..and the tax benefits start to make buying more attractive than renting..but right now, buying is just stupid.

i’m no expert…but it sure souns like 2007 is going to be another eyar of price drops…if rates hold steady, the peole who can/do buy will get even more for their money in the future.

i figure the only way you can get screwed…is if prices were to only fall a small amount, but interest rates skyrocketed…… but if that happened..wouldn’t prices fall even more… i mean at some point…houses can only sell for what people can afford to pay…and what peole can afford to pay is basd on their incomes.

Owning a home is like renting with a twist. Renters rent from landlords. Home owners rent from the bank. Renters rent forever. Home owners/renters rent-to-own. Some home owners just chose to rent longer. Some home owners chose to rent more then they can afford. Some home owners lose their rent-to-own privileges when they can’t pay the higher rent due to toxic rent. Personally I like the rent-to-own variety.

Some renters get to stay in their rentals for 20+ years at below market rents which dont rise with inflation;)

Some renters get to stay in their rentals for 20+ years

But just some. Isn’t the average length residence something like 5-7 years? I know my stints were 2, 4, 10, and 5 years.

“We renters could also be screwed by interest rates dropping to below 5 percent again. That could trigger another wave of buying, coupled with already slightly lower prices, sending prices skyward once again.”

Perhaps prices would skyrocket, if one believes low interest rates are what drove the housing boom. More than likely, it was mostly exotic loans that were the chief culpret. Once these are constrained, I believe prices will fall.

Anyone who thinks that lower interest rates will trigger another wave of buying isn’t paying attention. The ONLY reason the boom continued past 2003 (some would argue even earlier) was the complete and utter abandonment of lending standards combined with the widespread adoption of toxic waste mortgage products. The market was flooded with “homebuyers” who didn’t actually have any money, artificially inflating demand. As soon as lending standards and down payments return, most of these people will be restricted entry to the market and demand will take a big hit…