Actually, joe, that’s NOT “the kind of thinking that went into this bubble in the first place.” The kind of thinking that produced this bubble was the idea that price appreciation would more than offset any problems with negative cash flow. Had people bought houses purely based on cash economics we wouldn’t be where we are today. I’m NOT suggesting that people use I/O loans. I merely used an I/O loan for the purposes of making a better economic comparison to renting from a tax standpoint. I thought I made that clear in one of my posts. Personally, I have a fully-amortizing 30-year fixed-rate mortgage. I’d say that if you’re buying a home at a price in which your mortgage+tax+HOA payments are roughly equivalent to the rent you’d pay, in the long run you’ll be better off owning than renting, assuming you’re planning to stay awhile. In such a case, insulating yourself from the “rental cost increase” generally more than offsets most of the other issues you raised. But, to say it AGAIN, in most of SD we aren’t there yet. It still makes more sense to rent.
