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nosf41
2009 Sep 14, 3:58pm
The described scenario would not mean that your down payment money is lost or significantly reduced.
As long as the home prices remain constant - you should not worry too much about it. You would face a problem if a significant wage increase happens or if the lending standards are relaxed to the point that everybody can qualify for a large loan. Only in those scenarios would home prices go up, reducing your down payment relative to the purchase price.
Another (theoretical) possibility for housing price increase is that in case of US$ devaluation, a large number of foreign investors decide to purchase real estate in the USA. Not likely to happen.
Posssibly my worst fear... a la Mexico in the 1990's, or the US in the 1930's. All of that down payment money... wiped out with the stroke of a pen.
Can it happen? Will it happen? Should it happen?
Certainly, it's not impossible... I think for now the odds are small (