[irishjuggler]

Tell me when the popluation will drop and I'll tell you when those in the low end can start sweating.

It's precisely those in the low end who have the most to worry about. A rising population won't continue to drive up home prices if that population can't afford the montly payments necessary to sustain those prices. A low income couple who buy a $400,000 "low end" home in California with an interest-only ARM and nothing down will be wiped out if interest rates were to shoot up to 10% in a few years. There's a mentality that high interest rates are simply impossible. How quickly we forget that rates were higher than 10% as recently as 15 years ago. Why can't that happen again?

[irishjuggler]

"montly" = "monthly"

[palmer]

How quickly we forget that rates were higher than 10% as recently as 15 years ago. Why can't that happen again?

Short term rates (which ARMs are based on) will be held as low as possible while maintaining the "strong dollar" rhetoric. But long term rates could shoot up if the Asians decide to stop the gravy train. Ironically they could do that if they see such low short term rates that they lose long term confidence in the dollar.

[bigsigh]

My comments were addressed at the bubble bursting. If I own a home as a rental in the low end of the market, I'm not worried about the bubble. The population keeps the rental market hopping.

Earlier I commented on a phenomonen I am seeing more of. Three incomes per house. Whether it's grandma or adult child, it helps make the payment.