January 28, 2008

Why did millions of people buy "dream homes" when they knew damn well they couldn't afford them, and had no business living in them?


Was it HGTV's "House Hunters", MTV's "Cribs" and all the other housing porn on TV?

Was it women's nesting instinct gone mad?

Was it men who had to keep up with other men?

Was it the mortgage brokers, realtors and builders convincing the sheeple that yes, indeed, they COULD have that dream home and have it now ("don't worry about the payments, you'll make a MINT in appreciation!")

Was it GenX and GenY trying to prove to their Baby Boomer parents that they were as successful as them?

Was it the Baby Boomers wanting to go out with a flash of glory?

Was it the 90's tax law revision that made housing gambling so tempting?

Whatever it was, I hope to never see it again in my lifetime. And the fact that it happened is now crashing the American and world economies.

Bottom line: If you make $50,000 a year you should probably live in a house that reflects that you make $50,000 a year. If you can't make a 20% down payment, you should rent. If your sense of self worth comes from a f*cking house full of Pottery Barn crap, I recommend you reconsider your sense of self worth.


And I especially hope the housing crash causes the REIC's poodles HGTV and TLC go off the air. That would be a start.


47 comments:

perfect storm meterologist said...

That damn black box in everyones living room, people need to just shut that stupid thing off!

Anonymous said...

They bought homes because widespread multi-level fraud became the accepted way to apply for mortgages without fear of prosecution.
By the way, Countrywide is doing it again. Their business is up because they are once again accepting even the dead as potential loan applicants. Check it out! Fake work stubs, applications, work histories,etc. are being accepted again with B of A's backing to make things look good. Is any Government agency going to reveal this fraud?

markets down...gold up said...

It's that damn Kevin Costner movie 'Field of Dreams'

"If you build it they will come"

Ed said...

Keith,

I see a lot of blame put on the boomers for this. I disagree.

Boomers for the most part bought homes in the 80s and 90s and still own those homes. Sure, some got helocs, but that is a small piece of the puzzle.

It wasn't boomers that were lining overnight up to buy 5 houses in Phoenix or Las Vegas in order to flip them 3 weeks later. It was 20 and 30 year olds...does the name Casey ring a bell?

Living the "cribs" lifestyle is a gen x/y phenomenon, not a boomer phenomenon. The H2, the BMW, the Escalade with 25"rims, the 90" plasma, the $500 jeans, the $7 coffee. Not many 55 year olds buying that shit that I know of. Plenty of 25 and 30 year olds though.

It is also the gotta have it now mentality. Again, this is a 20/30 year old attitude not a 50/60 year old attitude.

I'm 33 by the way.

Anonymous said...

ego

Anonymous said...

Shallow boomers buying trophy homes and second homes

Anonymous said...

Beverly Hillbillies!!! Perfect!!!

Boom2Bust.com said...

"And I especially hope the housing crash causes the REIC's poodles HGTV and TLC go off the air. That would be a start."

Amen, brother.

Anonymous said...

I can say without hesitation it's women's instinct to nest that caused a lot of this mess. And usually it's not the guy who feels he has to keep up with friends, it's actually the women who does.

"My friends own, and all we do is RENT!"

I'm homeless but love hp said...

Because they saw everybody else getting free money from instant equity.It gained momentum as lending standards went to 0.We all saw it comeing.Now we are th smart ones who buy for 50 cents on the dollar and then sell to the next round of dumbasses.

Tangelo Mozilo said...

A combination of cirumstances coincided perfectly to create this mess. They are:

1.) Alan Greenscam's cheap money policy that made all this possible in the first place;

2.) National media affecting dumbass Gen X and Gen Yers, who mistook TV for reality and thought that they deserved all the opulence they saw portrayed in it;

3.) Their greedy boomer parents who led by example and taught their kids the importance of keeping up with the Joneses;

4.) Transactions conducted by a profession with a ridiculously low barrier to entry and flimsy ethical standards; and

5.) A gaggle of politicians who depended on others to tell them what they should think about the economy.

Anonymous said...

Nice photo. Is that the Hillary white house? I'll bet Jethro could do a better job as treasury seceratary than Paulson, after all he can cipher.

Anonymous said...

The USA is a nation full of mindless sheeple practicing male monotheism.

Once people buy the belief system that big daddy in the sky will take care of them (biggest con on planet earth) they are mere pawns for the wealthy. Hence war, high taxes for poor & middle class, wall street whore bubble-Bernanke, deregulation of criminal corporations, loan sharking that made the RE bubble, squandering of resources for McMansions.

The unthinking, unconscious sky godders can be sold ANYTHING!

Anonymous said...

60 minutes laid out the logic perfectly - you got a bank willing to pay you money to live in a primo crib for 2 years. After that, if it goes up in price, you flip, if not, you walk away. All you need is a willingness to trash your credit rating for a few years and no sense of shame, it's all upside.

Mammoth said...

"If you can't make a 20% down payment, you should rent."
---------------------------
WTF? For credibility’s sake, let’s just cool it on these broad generalizations!

Bought my first house in ’97 with just 3% down, albeit after looking for months, for a decent one which we could afford.

We purchased another in 2001, this time with a 5% down payment. If we had waited until we had saved 20% of the purchase price, we would have waited years in this crazy market. By buying with a small down payment,we locked in a price before if became obscene.

Desbite enduring layoffs, etc, we have always been able to make the house payment due to excercising financial prudence.

People need to realize that the downpayment is just ONE factor in the decision to buy vs. rent, and they should excercise common sense (as opposed to wishful thinking) in this and all other decision that will impact their quality of life.

-Mammoth

Anonymous said...

At its most base level, it's nothing but the attraction of mates - that's the only reason anyone does anything.

Anonymous said...

.










GREED








.

Lisa said...

"If you make $50,000 a year you should probably live in a house that reflects that you make $50,000 a year. If you can't make a 20% down payment, you should rent."

The sad thing is that before the "miracle" of global securitization, someone making $50K a year would NOT have been allowed to buy a house for more than $150K. No downpayment? Come back when you've got 10% or 20% saved up. Credit cards? Get them paid off. Cash reserves? We'd like to see 6 months in the bank, thank you very much. Spotty employment? Not a chance.

When people started to get "approved" for insane amounts, they started to think they were entitled to live at that level. Why live modestly when you're qualified to buy something bigger?

Anonymous said...

I agree mammoth. I bought my house with 5% down and could easily afford it as well.

20% down is like 6% commission. A number arbitrarily picked 50 years ago that is clung to like it's gospel.

Anonymous said...

Unemployed GenXers trying to keep up with the Joneses on TV.

Anonymous said...

Wait a minute. The people in the pic had Texas tea. :)

I think they qualify.

Anonymous said...

Here is Seattle, it wasn't that people were shelling out 600,000 on their dream homes... They were shelling out 600,000 on a 2 bedroom 1000sq ft bungalow in a just ok neighborhood.

People were concerned that if they didn't streach to buy now... they never would be able to afford a house. Any house.

I tried to talk everyone I know to wait... but alas it's hard to sit at home when everyone else is at the dance.

BTW, a 20% correction on a $600,000 is still $480,000... still not that affordiable.

Frank@Scottsdale-Sucks.com said...

I think it was all of the above, plus Americans' obsession with credit and the perception that you don't really have to pay for something if it's on credit.

It wasn't boomers that were lining overnight up to buy 5 houses in Phoenix or Las Vegas in order to flip them 3 weeks later. It was 20 and 30 year olds...does the name Casey ring a bell?

I beg to differ. Having lived in both Phoenix and Vegas I can tell you most of the housing gamblers were 50-something tools in Tommy Bahama shirts and their plastic surgery queen wives.

I don't particularly blame the boomer generation like most people do - I would agree with others that GenX/GenY is the worst with their entitlement mentality, but the boomers in many ways have a lack of responsibility with credit because they were brought up in the Industrial Age where your employer and the government were supposed to take care of you for life and many still have that mindset. They grew up in the era of guaranteed pensions and a guaranteed job for life with guaranteed pay raises every year. They assume someone or something will always be there to cover their butts if they go too far. Hence the demand for a "bailout."

The bottom line: People were STUPID. Regardless of age.

Frank@Scottsdale-Sucks.com said...

"If you make $50,000 a year you should probably live in a house that reflects that you make $50,000 a year. If you can't make a 20% down payment, you should rent."

The sad thing is that before the "miracle" of global securitization, someone making $50K a year would NOT have been allowed to buy a house for more than $150K. No downpayment? Come back when you've got 10% or 20% saved up. Credit cards? Get them paid off. Cash reserves? We'd like to see 6 months in the bank, thank you very much. Spotty employment? Not a chance.


Agreed. 20% down, 700+ credit score, and a loan of no more than 3x your income.

What really makes me laugh is all the people who got no doc, no income verification loans, but if you try to rent even a crappy apartment without pay stubs, you will get laughed out of the room.

When I moved to CA to rent I found that the landlords go through your credit and background with a fine-toothed comb. The landlords here in the Newport Beach area are brutal - a few late payments? Denied. Too much debt? Denied. Can't prove your income to the cent? Denied.

If the banks had been doing that all along we wouldn't be in this mess. Instead they let a bunch of losers "buy" who weren't even qualified to rent.

Anonymous said...

The bottom line: People were STUPID. Regardless of age.

Hear hear! I agree!

Let's stop trying to turn everything into a Boomer vs GenX-Y conflict.

Granted these generations don't see eye-to-eye, and there's plenty of other mud to sling around, but this frenzy crossed generational boundaries.

As they say... an apple doesn't fall far from the tree. If your boomer parents were greedy, chances are you ended up as screwed up as they were.

If they were frugal and you lived through some tough times yourself - that was probably a good lesson for you which has played itself out in this market.

There are no hard and fast rules though... greed is an individual trait - not a generational one.

Anonymous said...

Because they could.

It's the lenders that changed, not the buyers. Hell I'd have driven a Ferrari Testarossa everyday to high school if some dumb ass lender would've given me a no down pay option stated income loan for a new car. They probably just figured I'd mail the keys in in a few years and stick them with a used car worth half as much. But houses are different right???

Anonymous said...

I see a lot of blame put on the boomers for this. I disagree.

Boomers for the most part bought homes in the 80s and 90s and still own those homes. Sure, some got helocs, but that is a small piece of the puzzle.


Are you kiddin' me? Most of my Baby Boomer neighbors bought up to 3 homes or condos during the mania, and now they can't even pay the property tax on them (I see their financial mess on public records).

Boomers still had the nerve to look down on me just because I sold at peak and was now "a renter" by choice and responsible planning. I could feel their attitude when we met: "OMG, a renter lives next to us, Baby Boomers!"

The difference is that I'm solvent and they need pills to sleep. Baby Boomers destroyed this country and the environment with their greed. And they're too stubborn to admit it.

Andrew Hac said...

OK, Snapper Turtle and all other tortoise-like creepers out there,

A house is a place to sleep in, eat your meal, do your homeworks, make kids. Not every turtle is entitled to own a house. Owning a house is a privilege, not a right.

Most Americano believe that it is their God-given right to own a house. That is incorrect. If you are poor, ignorant, illiterate, uneducated then you do not have the mean or the privilege to own a house. No BUT, IF, HOW, etc...

The game of survival is simple. You are strong then you will survive. Joe6Pack is like a gazelle in the African Segenreti plain, his destiny is to be hunted and chased down, devoured by the lions, the leopards, the hyenas, etc... Joe6Pack does not simply possess any right to own a house in the land of the Americano.

Got it, Turtle ???

Anonymous said...

There are no hard and fast rules though... greed is an individual trait - not a generational one.

Anyone who "seriously" studied Marketing disagrees with you. Generation traits and robotic bahavior are integral of any target market.

Anonymous said...

If your sense of self worth comes from a f*cking house full of Pottery Barn crap, I recommend you reconsider your sense of self worth.


Awesome!

Doc the ZEALOT said...

The USA is a nation full of mindless sheeple practicing male monotheism.

Once people buy the belief system that big daddy in the sky will take care of them


Not if they read HIS BOOK. Go to biblegateway.com and search on the words "rich," "riches," and "wealth." The Bible is full of admonishments to avoid debt, to avoid get-rich-quick schemes, and to accumulate wealth slowly by hard, honest work.

We wouldn't be in the financial mess we're in if people followed the Bible's advice on money.

The charlatans and mountebanks who try to use the Bible to fool people into sending them money, promising them "prosperity" from God, only fool those who don't bother to read what the Bible says. Jesus Christ warned:

Then he said to them, "Watch out! Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions."

And he told them this parable: "The ground of a certain rich man produced a good crop. He thought to himself, 'What shall I do? I have no place to store my crops.'

"Then he said, 'This is what I'll do. I will tear down my barns and build bigger ones, and there I will store all my grain and my goods. And I'll say to myself, "You have plenty of good things laid up for many years. Take life easy; eat, drink and be merry." '

"But God said to him, 'You fool! This very night your life will be demanded from you. Then who will get what you have prepared for yourself?'

"This is how it will be with anyone who stores up things for himself but is not rich toward God."


Luke 12:15-21

Anonymous said...

"...well the first thing you know...old Casey's a millionaire.."

Bwa ha ha

JC said...

You know no matter how bad things get and how low prices go there will be people who will deny the existence of the whole thing when it's over. Just like Holocaust deniers. Some people just want to keep their head up their ass. The ones who go bankrupt yes they'll remember but the majority will just hold through the lows so they don't have to sell for a loss and consider themselves savvy even though they could have made much better profits holding even the most conservative bond fund for how long it will take for this to play out. History will repeat and sooner then many think.

Anonymous said...

It was tough not to follow. My husband and I didn't budge but over the last 5 years, many times, after seeing friends make money without working, we caught ourselves saying" "We must be suckers."

Angry Monkey said...

I tried to buy a home in 05. We thought we could afford it, if we stopped eating. We made a lower offer on a nice house. My real estate agent looked at us like we were nutz. She wanted us offer more. We were out bid and then I ran into this site and patrick.net.

I wanted to be like everyone else around me. I wanted a nice house to call my own and to show off. I wanted to have garden parties and invite the family over to grill.

Now everyone around me is hurting and the money I saved is allowing me to look at better houses. I am more prepared for the oncoming crash than everyone else around me.

Qannaboss said...

Say I make 50K/yr at the moment and really would rather make a mortgage payment than throw away my money paying someone else's mortgage (renting), but the catch is I don't have a down payment. I shouldn't get a 100% financed loan? From what I've been reading lately, I know I should never get an ARM or I might lose a leg, nor should I attempt to get a loan for a dream home that I can't afford, not that anyone would finance that to me anyway with the way things are. What if I can live within my means and make a mortgage payment with a little left over to save or have fun with? Why shouldn't I get a 100% financed loan? Please don't bash me, I'm young and trying to learn the market, verbage, and all that jazz so I've been reading your blog along with many others to trying to make sense of what's going on. Please advise, I hate throwing away my money on rent.

Anonymous said...

I hate Republicans.

I hate boomers.

I hate Bush

I hate Walmart

I hate Haliburton

I hate fox news

I hate Wall St

I hate realtors

I hate rich people

I hate everything and everyobody because I am a low-life pathetic overweight balding bitter divorced man renting a studio basement apartment.

Wahhhh wahhhh wahhh

Bunch of cry babies. Grow up people. Life is what you make it. A lot easier to blame your shitty life on someone else though.

Anonymous said...

Anonymous said...
I can say without hesitation it's women's instinct to nest that caused a lot of this mess. And usually it's not the guy who feels he has to keep up with friends, it's actually the women who does.

So it was the women who took out helocs to buy boats, and Harleys and quads for all the kids?

Anonymous said...

Gannaboss, you are not throwing money away on rent.

1. The largest benefit of renting is mobility. What if you get fired from your job and need to move across town or even out of state to find another job that pays more than $10/hour?
2. When you "own" a home you are throwing away money on loan interest, property taxes, home insurance, home repairs, water/sewer/trash expenses that are usually paid for when you rent.
3. To make up for all of the negatives from #1 and #2 the house needs to be appreciating at a rate higher than inflation for you to recover your losses... homes today are deflating so it not financially beneficial to buy.

That said... If you don't care about losing money then go for it.

Frank@Scottsdale-Sucks.com said...

Say I make 50K/yr at the moment and really would rather make a mortgage payment than throw away my money paying someone else's mortgage (renting), but the catch is I don't have a down payment. I shouldn't get a 100% financed loan?

Here's the straight answer: If you haven't been able to save for a down payment, you're not responsible enough with money to be approved for a loan.

Plain and simple.

Regardless of what Nancy Pelosi and Hillary Clinton and B. Hussein Obama tell you, you don't "deserve" a loan and are not "entitled" to own a home by your birthright.

You should have to earn that privilege after you prove you are financially responsible by living below your means and saving for a down payment.

Move somewhere cheaper. Buy a cheaper car or take the bus. Give up Starbucks and beer. Don't go out for a year - stay home and read instead (you might even learn something if you do that).

For the year leading up to when I started my business in 2003 I lived in a dirt-cheap crappy part of Phoenix, never went out, cooked at home every night, and for the reading I borrowed all the books from the library and didn't spend a cent. That lifestyle allowed me to save most of my money for a year. And now I'm financially free and living the good life.

Sorry, I know that's not what you want to hear, but it's the hard truth.

Paul E. Math said...

qannaboss, you say that paying rent is 'throwing money away'. When you eat, do you look at the money you paid for the food as 'thrown away'? Do you have a car? Do you regard the sticker price or your monthly car payment as money 'thrown away'?

When you rent you get housing in return - you are NOT throwing your money away. It may seem that way because you recently moved out from your parents who paid for your housing for you so you think of housing as something that should be free.

Be fully aware, whether you rent or whether you buy a home, you are paying money for housing. The most thorough and accurate studies show that, on average, adjusted for inflation, home prices rise less than 1%/year. So you may have paid off your home in 30 years but you've paid several times that amount in interest, maintenance and taxes. Nothing is free in this world.

It was only a mass delusion created by the recent bubble that has made it look like you can get free housing and even profit by having a home - this is NOT the typical experience, historically.

Now, to address your original question about 100% financing. Home prices are falling and taking out a 100% mortgage means paying extra and it means that soon you will owe more on your home than it is worth - what if you need to move for some reason (get married, have kids, new job, have an illness, etc)? You will have to pay money to get out of that house and you will still have no equity. Getting a 100% mortgage only makes sense in a rising market - in a falling market as we have now it is the height of folly, no offense.

a.creampuff said...

A Newsweek reporter wrote a book in answer to your question called "House Lust".

http://tinyurl.com/38wqpl

He comes down squarely on the side of "keeping up with the Joneses" and the media. It's easy to confuse glossy magazines and t.v. shows with reality.

Anonymous said...

Hey Qannaboss,

I suppose your a First Time Homebuyer. For starters I recommend
looking at your local city, county, and state websites to locate excellent first time buyer programs. Most realtors and banks do not push these programs because of their own greed. City usually hosts home buying seminars that will walk you through the process.
You can also locate some great info on CREDITBOARDS.COM/ FORUMS.

Now as far as purchase price, I would look at the rental price of a 1300 s.f. 3bed/2 bath (-) 15-20%.
I dont care what listing prices are, that is where you need to buy at. If you ever get in trouble or if you want another property, then you could rent it out. The house must cashflow!!!

You also have to study your market, which means locate areas with best schools. You can find info. through city or school district. Dont buy in bad areas, busy streets, near train tracks, and I personally would stay away from condos (they are going to get killed in this market)
If you want Reo info look at BIGGERPOCKETS.COM / LINK TO REO PROPERTIES.

This is going to be the most historic crash ever. If you learn all this info. now there will be great advantages for you in the near future.

Trust me, if you can learn all of this info then you will know about 100 times more than your average realtor. Real Estate is supposedly their trade yet they know very little about it.

ICEMAN

Anonymous said...

"Baby Boomers destroyed this country and the environment with their greed. And they're too stubborn to admit it."

I am a Boomer and I admit it! The boomers, once the vanguard of progressive change, have become monsters!

I moved to Austin TX and left that Californicated shithole about 5 years ago and now live on a ranch 1/2 hrs. west of there. I am ashamed of my generation for a variety of reasons, some identified on this web site.

I too saw this coming but was a bit early. I am now secure in retirement. All the bubble chasing seems to be driven by Boomers trying to make up for lack of self control. Shame on us!

If I were Gen X or Y, I would be plenty pissed. After decades of immediate self gratification we came up with the 'Just Say No' campaign hoisted on X and Y, so now we will grab for ours at the cost of generations that follow.

Satisfied ???

Qannaboss said...

Let me clear some things up. I have been very offended by some of your ignorant and condescending replies. I am young, but not so young and naive that I've never lived away from my parents rent free. I have lived on my own paying rent for many many years. I wasn't lucky enough to be born with golden spoon in my mouth, nothing has ever been handed to me, I have worked hard for all of my worldly possession's. And I know what hard work is and what it takes to make it in this world today. Because of the mixed replies I received I am going to attempt to address each one individually.

*** Dear Anonymous that addressed me as Gannaboss. I am losing money by paying rent.
1. You must have bought at the peak of the bubble; therefore, want me to rent from you and pay your mortgage. The two things I have going for me right now is great stability with my CAREER and good credit, which I might add is not a $10/hr job. In what fictional land do you live in where $10/hr equals $50K/yr? I actually do make more than $50K/yr, have a stable CAREER and have no problem finding a position ANYWHERE because I'm good at what I do, thank you.
2. Paying a mortgage and "owning" a home are two very different things depending on your perspective. All the costs you mentioned except the loan interest payment goes along with "owning" a home if you really do own a home, you should know this. Lucky muckers.
3. Thanks for finally providing me with some good advise rather than trying to drag me down to your level. I never said I was going to go get financed tomorrow, all I asked for was advise, so thank you.

*** Dear frank@scottsdale-sucks.com
Thank you for your answer whether it's straight or curvy. I appreciate all the feedback I can get at this point. I'm just starting to learn about the market and the state of our economy. I'm 25, how much money did you have saved for a home when you were 25? Did I ever say I "deserved" a loan? Where the hell do you negative trolls pull this info from? How did you know my diet consists of Starbucks and beer? Man you're good. I like hearing the truth; however, I don't appreciate the condescending attitude in most of the replies I have received.

*** Dear paul e. math
I do not look at the money I pay for food as thrown away because everyone needs to eat in order to continue living, it is a necessity. Buying a home is NOT a necessity, but having shelter is, so I see your point in paying rent. If you could pay rent or pay a mortgage+monthly costs that go along with it and each option was the same amount. Would you pay a mortgage to hopefully own a property one day or would you continue to give your money to someone else so they can? I never said anything in free in this world, why does everyone that flamed me insist I'm trying to get something for free because I want to do 100% financing? I appreciate the advise, but I'm not trying to get anything for free, dang. As much as I'm bitching, I truly appreciate the advice. I know the market is falling right now and as I said before, I don't plan to get financed tomorrow or even a year from now. As in my original post, I'm researching and studying, so naturally I have questions and I was hoping to get a little more positive feedback than what I've received from most.

*** ICEMAN, finally, someone positive and supportive. First off, thanks for not bashing me immediately. I think you are the only one who truly understood the scenario I put out there. Secondly, yes, I eventually will be a first time buyer, so I'm trying to soak up all the information I can. Everyone else thought I was going to run out and buy a home tomorrow. I have already done some of the things you've suggested and I want to thank you again for your suggestions and positive reinforcment on learning about what this crash is, why it's happened, and how I can come out on top from learning by other peoples mistakes. Hell, that's why I'm here in the first place. If you have more information I can learn from please email me (qannaboss "at" gmail "dot" com). Thanks!

*** Everyone, sorry about all the bitching, but most of you got the wrong impression about my question. Maybe I stated it wrong, again, maybe I didn't because ICEMAN sure did give me the best answer. Thanks to all, even the negativos.

blame_the_boomers said...

I see a lot of blame put on the boomers for this. I disagree.

I agree that the Bling-me-now culture is most endemic to the young.

HOWEVER, the young learn from the old. The young didn't run CountryWide, the US Government, MTV, or Madison Avenue.

Ask your average 30-something parent what they think...most say they can hardly bestow values on their children so long as the kids live in OUR SOCIETY. The only solution involves quitting your job, moving to small town America, having no TV or internet, and homeschooling your kids. Good luck with that - you need 3 jobs to pay your mortgage, small town America hasn't created jobs in 15 years, you can't afford healthcare without your corporate gig, and you don't get tax-credits for homeschooling - even as you get taxed out the *ss to support the public school system.

The boomer elites poisoned your kids to increase their short term returns on Chinese made toys. They created the consumer economy. They created the corrupt society.

Paul E. Math said...

qannaboss, follow-up:

Iceman is right, if you factor in all your expenses and you can pay less in buying than you would in rent then I suppose there is little wrong with a 100% mortgage. But they do charge pmi on anything above 80% (or else you get a heloan with a higher interest rate on the 20%) - so you pay more for a 100% mortgage.

Sorry if I came off as condescending but that thing about 'throwing money away on rent' did make it seem like you thought housing should, in the long term, be free. And I can't tell you how many people I hear operating on the mistaken belief that they can 'live for free' just because they bought instead of renting. Guaranteed, those people aren't including all the taxes and maintenance that they pay and they aren't factoring in inflation in their calculations.

Typical experience is that homeowners pay 1-2% of the purchase price per year in maintenance. Also, all the taxes and interest you pay on that mortgage - noone gives you that money back. Make sure you factor all this into your break-even analysis.

Regarding inflation, you may sell your home for double what you paid but if inflation has doubled the price on everything else then the $400k you get when you sell is worth exactly what the $200k was that you paid. A lot of people will tell you they 'made' $200k on their home when in actual fact they made nothing whatsoever.

And I'll repeat my advice about leverage - it only makes sense when prices are rising. And home prices will never ever again rise like they did between 2000 and 2005. Home prices rise at the rate of inflation, that's it. A home is a place to live, not a way to get rich.