I beg to differ, the key now is interest rates and priciple. A large number of the loans on houses (equity and mortgages) are now interest only and arms with teaser rates. Those rate are this year starting to reset in earnest. A situation only mad worse by the interest rate hikes from the fed. When these interest rates go house payments go up dramatically. Could you afford for you house payment to increase by 30% to 505 in one years? And if you could where in your family budget would you cut to pay for it?
"Could you afford for you house payment to increase by 30% to 50% in one year?"
I wouldn't like it, but it wouldn't break the bank. I wouldn't have ever put myself in such a postion in the first place, though. I'm on a 15 year conventional, with payment less than $800.00 a month (3 br 2 ba, 1600 sf, 1.25 acre lot, 20 min from downtown), and am building another, nicer home on a lake, 2900 sf, 3 acre lot, 15 min from downtown), payment just under $2,000.00 a month for 30 year conventional, once it converts from construction to permanent. The "old" house I may keep for a rental, because rents are finally showing some life here, and I would have positive cash flow from it as best I can tell. The "new" house has taken forever to build, due to various issues with the builder and the county, but it has appreciated a surprising amount during this time. As a result, I'm not overly concerned. I could sell the lake house pretty rapidly, for considerably more than I have in it, if necessary, but I don't currently foresee any need to do so.
I assume you're still renting, in an expensive area, and hoping to help talk the market down so you can get in ... accurate?