patrick.net

The lower the interest rate, the less housing will cost.

The higher the interest rate, the less housing will cost.

An avergage mid manager working at Saleforce.com, VISA and hundreds of other similar companies for 5 years is probably sitting on around 100K-250K in stock options.

In other words, they are potentially sitting on ether -- or better yet, a Whoopie Cushion. Witness Enron.

It doesn’t usually work this way.

The only example I can think of when it didn't was the seventies, and that was quite a different scenario than the one we presently enjoy.

zzyzzx says

That and crappy single pane windows.

God, don't get me started! All the energy conservation steps you would take if you owned the property and lived in it, are NOT things a landlord wants to pay for. Maybe they'll give you a few CFL because they saw them on sale at Costco, but that's it. Double paned windows? Forget it!

/\ /\ Interesting analysis. What do you predict for housing values if interest rates are taken down even further?

One major component that strangely gets overlooked in this type of debate is the ongoing erosion of middle-class incomes. This was less of a factor in the eighties; in the nineties, we had access to cheap debt as a stopgap.

If we somehow really have reached the bottom as you believe, (and I do not believe), then it seems the very best case scenario is that the market will country lane along the bottom for years to come unless we witness some serious reversals of fortune where median salary stagnation/diminution is concerned.

pkowen says

toothfairy says

pkowen says

I’ve rented the same place for 3 years, and other than the washer/dryer (which are fine, if old), it is pretty heavily upgraded.

That’s part of the problem. There’s no cashflow so that rental you’re in isn’t really a rental. It’s certainly not a sustainable situation for your landlord. Eventually you’ll be asked to move.

Really? Have you met the landlord? Know about their finances? This person put down $500G and I’d say she does break even on my rent. Not a good investment in my estimation but I am not worried about being asked to move.

nope I dont know your landlord but 500k down heavily upgraded house and the rent just breaks even? whoever bought the house it doesn't sound like their intention was to keep it as a long term rental.

SF Ace,

Why do you spend an extra 5 letters to make perfectly fine "method" into "methodology?". When I see (or hear) "methodology" instead of "method" I usually also smell b*llsh*t. See that word "methodology" in the WJS alot.

ha. great post sybrib.

I think housing is headed up regardless.

Eventually, yes - but your analysis brushes a lot under the rug in the meantime. Just for starters, whenever markets overshoot, they always over-correct. Since that hasn't been allowed to happen - thanks to aggressive policy measures drafted to prevent that very phenomenon - I think the real opportunities still lie ahead. The pendulum does not swing hard in one direction only to stop in the middle.

It might move sideways for a few years like it did in the mid 1990s, but there’s too much money in the system for prices to decline below the 2009 bottom. Instead of broke and desperate to find a place to live, we have Americans fretting about the market and wondering if they will have to rent for a little while before their credit is cleaned up enough to buy again……..while drinking their $5 coffee at Starbucks and talking on their $80 a month iPhone.

There's a rather big difference between discretionary creature comforts/poverty salve like lattes & shiny toys and tying up your cash in a thirty year mortgage on an overvalued residence.

I often tell people my tenants could easily afford the mortgage on the home they live in, if they only had the credit.

Aren't the credit requirements for an FHA insured loan something like 580 for the flagship 3.5 down loans?

I have tenants paying $2000 a month rent in a house with a mortgage that costs me $990 a month @ 5.5% no less. Oh sure there are taxes and insurance and upkeep and I paid 20% down…..but is there any doubt that this family would prefer to buy if someone would loan them the money? At twice the price even?? Sure they would. This is HUGE pent up demand and no one is accounting for it.

I don't disagree that there's a kind of muscle memory among most Americans when it comes to which pit to throw their money into, but I suspect that stagnant and declining income levels and the (rational) fear thereof are much more of a factor in housings ongoing correction than dinged credit ratings damming a surge of eager buyers. If it was just a matter of credit waylaying all of this supposed money on the sides, you would see some model of lender emerge that specialized in making loans to those people. Anything to relieve the pressure!

As an aside, I also sense a certain level of disenchantment toward the conventional wisdom of home ownership setting in among the the younger helots of the middle class. My hope is that they will seek something more fulfilling to do with their daily crumbs than shackle themselves with mortgage debt. Leave that jazz to the old & wasted!

Austinhousingbubble says

One major component that strangely gets overlooked in this type of debate is the ongoing erosion of middle-class incomes

Austinhousingbubble says

a certain level of disenchantment toward the conventional wisdom of home ownership setting in among the the younger helots of the middle class.

My partner and I are 30. We are "middle class" in lifestyle, education, profession, and living standards (though not in mentality or values, which is I guess what was once termed "bourgeoise"). Homeownership seems like a ball-and-chain. We like to move around; we have no attention span and get bored easily. Yeah, MTV made us this way. All (yes, all) of our friends are this way, too. But like attracts like; so there's no evidence in that.

Personally, I view homeownership as an endgame; a retirement plan. We only want to buy one house in our lifetime. Maybe that's a foolish ideal, but probably no less foolish than how many others have treated homeownership. We may forego that, however, and retire in Mexico: the only place where our lost middle class's savings will still be able to afford the Golden Years plus a machine gun for self-defense.

'Til then, we'll keep on renting/saving/investing/trucking.

Just because owning a house is more expensive now, it doesn't mean you shouldn't do it. I think you can work around the rental problems, but if you don't want to and have the money to risk, there's no big deal in buying a house. My problem is paying today's prices if you can't afford to lose some of the money or somehow convincing yourself you're investing rather than spending your money on something you want.

@Austinhousingbubble

Actually, the actions taken by the government were designed to stop the pendulum. The momentum of the drop has been stopped dead in it's tracks. Some say we're going up, some say we're going down. The important thing is no one is claiming nose diving numbers anymore, the pendulum stopped.

For us to further correct from our current position will require lots of momentum to get that pendulum going again, since banks and other organizations are moderately secure now, and unemployment seems to be leveling off, and world economics are decently stable, it's unlikely we're going to see that.

Not to mention when you see a pendulum effect the "end game" is the resting point of the actual pendulum, so if we stop it from moving, we in effect stop the massive pull backs everyone was expecting, and settle more into a path with corrections taken into account.

Renting is great if you can get over the mental idea that its temporary. if your landlord is lax about the place or trust you. you can easily start painting, putting shelves on the wall, etc.. pretty soon, renting seems more permanent.

Personally, I view homeownership as an endgame; a retirement plan. We only want to buy one house in our lifetime.

I think that's the ideal mindset, really. I would much prefer to live in a community built upon that sensibility than the move-up money-for-nothing gang.

Actually, the actions taken by the government were designed to stop the pendulum. The momentum of the drop has been stopped dead in it’s tracks. Some say we’re going up, some say we’re going down. The important thing is no one is claiming nose diving numbers anymore, the pendulum stopped.

That's just it -- the government drafted radical if dubious housing policies to try to circumvent the inevitable, but it's temporary. They've effectively kicked the can down the road until the next bust cycle, though probably not even that long.

No, they stopped the momentum. There is no more pendulum effect. The prices went to where they should have and stopped. Without momentum, prices will neither go crazy up or crazy down.

No, they stopped the momentum. There is no more pendulum effect. The prices went to where they should have and stopped.

They didn't 'stop' anything - they've slowed it down. Visualize a giant rug (spun from the fibers of your future tax dollars) thrown over a manhole cover. You still fall, but it takes longer. Again, unless there are radical permanent changes to housing policy that recreates the effect of wealth/cheap credit as during the housing bubble, then there's nothing to offset the diminution of middle class incomes. Therefore, housing will just unwind slower.

Without momentum, prices will neither go crazy up or crazy down.

Nobody said anything about crazy up or crazy down. I said the correction has been stalled. Based on the history of all previous asset bubbles, an over-correction is yet due, unless you really think this-time-it's-different.

I guess you didn't even understand what you had written before. You said pendulum, which is a swinging back and forth motion. They stopped that, by stopping that motion the pendulum no longer moves. To make it move, we'll have to have good news / bad news / something happen, we have to build a momentum up again of lots of sellers or lots of buyers to make the prices move. To make it move MORE, we'll need MORE of those actions. As of now, there isn't much happening. Nothing terribly good, nothing terribly bad.

Do you understand why they put the 500 point drop rule into the nyse? http://www.ehow.com/about_5255094_nyse-market-point-drop-rules.html

It's to stop the momentum. Stop that, and to restart it you need more of something. More bad news, more sells happening, more of something. When the market is rushing in a good direction or bad direction, if you break the cycle, it will require a new energy source to start up again. A simple 15 minute break in the stock market does that often. It gives time to think, adjust and plan their next moves.

For housing, they simply stopped it from crashing and removed all the momentum. To restart it will take an actual momentum.

I guess you didn’t even understand what you had written before. You said pendulum, which is a swinging back and forth motion.

I understand the mechanics of a pendulum, but thanks anyway.

They stopped that, by stopping that motion the pendulum no longer moves.

They didn't stop it; they stalled it; and they cannot stall if forever. Understand?

For every action there's an equal and opposite reaction. Yes, the government has slowed the rate of that reaction (over-correction), however, the policies designed to slow that rate are not permanent, and there is no "terribly good news" as you put it to help offset the effects of the correction when this policy is phased out. They may have manipulated the velocity and even the linearity of the correction, but they have not contained or successfully 'stopped' the correction in housing, thanks in part to the sheer mass of the original problem. They simply kicked the can down the road with the help of the printing press.

To make it move, we’ll have to have good news / bad news / something happen, we have to build a momentum up again of lots of sellers or lots of buyers to make the prices move. To make it move MORE, we’ll need MORE of those actions. As of now, there isn’t much happening.

Make it move. It is moving. Downward. Slowly. As for not much happening - you mean there isn't an asset bubble creating phantom wealth? I agree.

Do you understand why they put the 500 point drop rule into the nyse? http://www.ehow.com/about_5255094_nyse-market-point-drop-rules.htm

l

Rules and the NYSE in the same sentence. Doesn't that look slightly oxymoronic? I really don't pay any attention to that rope-a-dope casino. I'm about 70% cash.

For housing, they simply stopped it from crashing and removed all the momentum. To restart it will take an actual momentum.

Y'know, there's simplifying things and then there's just being simplistic. All asset bubbles over-correct. The rate (momentum) at which they over-correct is not the issue. Again, perhaps you feel it's different this time, but history is not on your side.

Many forgotten what is like as recent as March 2009, when the banks were not even functioning, they were looking into their capital reserve and determined if they can survive, depositers were scrambling to get their money out, DOW went below 7000 and 12 million jobs were lost in a period of 18 months. A mall that was leasing for 18K as recently as 2007 were signing short term lease for 4K (personal situation). Commerical REITS were going bankrupt on purpose to get out of bad deals signed in 05-07. By all accounts, things were falling apart. Low prices lead to more bank failure, which leads to more job loses and even weaker housing, the death spiral if you will.

You can say the fed threw everything they can to stop the death spiral. Most major banks stayed intact, the DOW recovered nicely thereafter and jobs are coming back slowly, although not in the housing related industry. Banks are profitable and their liquidity problems are behind them. Jamie Dimon of JPM puts it best, the economy goes when the bank goes, when the bank tanks, the economy tanks. Well the banks are building a base and so is the country. Sure foreclosures are at historical high still, but it was built-in anyway and kept it from even getting much worse. The fed probably stopped even more millions of homes from going underwater and ultimately foreclosure, interest rates put more cash in the pockets for more people and kept millions off the unemployment roll.

How do you create the same set of scenerio like what happened in March 2009, you can't? We're not going to have any net loss of jobs, banks and business' are positioning themselves for the next five years, not worried about hunkering up. GDP is up, not down regardless of the winding effect of stimulus. 2Q-2010 S&P earnings were just shades off record. BofA is looking to restore dividends. From that perspective, the effect of the economy is more measured and controllable.

It'll take many years to work through all the problem loans and housing excess, but unlike 2008 and 2009 when things were falling apart fast, it'll be work through in an environment that is managable. 2009/2010 buyers are the strongest of the banks portfolio due to incredibly high lending standard and serve as the new base. pkennedy's analysis is spot on.

Of course, something like this is ripe for disagreement.

Unfortunately, for the two lost posters on here, the analogy of a pendulum and housing prices is not quite accurate. If you reach out and stop a pendulum, it loses all of its energy (momentum)

Lost? What I'm suggesting is that the policy enacted to contain the housing correction did not have the effect of reaching out and actually stopping the pendulum. Now, just to belabor the analogy - I don't envision the printing press as a great wind machine creating a draft strong enough to actually slow things down to the point of total stasis as the other poster suggests.

I should have stated that they temporarily stanched the bleeding or temporarily dammed the flood. The basic point remains that no force great enough has been implemented (or even could be) to prevent the historical trajectory of every other asset bubble of this magnitude, which is over-correction! Goddamn...

It’ll take many years to work through all the problem loans and housing excess, but unlike 2008 and 2009 when things were falling apart fast, it’ll be work through in an environment that is managable.

How do you propose we will work through this? What will be the driver? Inflating another asset bubble? Perhaps a bond bubble? What about the small business owner? How about unemployment, and the idea that it could take up to ten years before it reaches pre-recession levels? That's also assuming we don't have a bust cycle before then.

We are a consumer nation with an economy that thrives on serial financial bubbles. We had a rare opportunity to regroup post-meltdown...to implement a little shock doctrine in a more reformative and productive manner than it is usually deployed...and we blew that chance. Now we're in for a big fat hangover of debt liquidation and further downsizing for the foreseeable future.

Jamie Dimon of JPM puts it best, the economy goes when the bank goes, when the bank tanks, the economy tanks.

How can you seriously quote that guy as any kind of sage? Besides, is that dynamic really one to rejoice? Wall Street now controls Washington instead of the other way around. As David Stockman - Director of the Office of Management and Budget in the Reagan Administration recently stated in a NYTimes Op-ED, Wall St. owns Washington: "its unproductive trading is extracting billions from the economy with a lot of pointless speculation in stocks, bonds, commodities and derivatives." Same old same old.

2009/2010 buyers are the strongest of the banks portfolio due to incredibly high lending standard and serve as the new base.

Define 'incredibly high lending standards.' Do you refer to 3.5 down and a credit score of 580? Or perhaps you refer to the new thousand dollar down loans? I guess that does seem incredibly high in contrast to the NINA loans from 2006.

We’re not going to have any net loss of jobs, banks and business’ are positioning themselves for the next five years, not worried about hunkering up.

Yeah, when you own DC and can mark-to-fantasy, anything's possible. The smaller community banks are less fortunate. Witness: http://www.ritholtz.com/blog/2010/08/fdic-bank-failures-july-31-2010/

Of course, something like this is ripe for disagreement.

It was just a tad bit hopium-tinged...

Have you ever seen a riot start? Or a group of people go crazy? How about during the bubble years of housing, how many times did you hear "You have to buy! you have to buy! it's awesome!"??

When people go crazy, they need a small break to re-evaluate the situation. Once that happens, people start to think rationally. Once they have time to put in corrective measures to block their own problems, they'll feel more comfortable.

*THAT* is what the government did. Stopped everything, gave people time to breath and think.

It gave companies times to implement more safe guards and create new contingency plans, etc.

The selling momentum is gone. There are now investors lining up for houses, WAITING for them to drop, hoping and praying they drop because they've now got credit lined up, moved their wealth into cash where they can buy, etc. If they are there WAITING, it isn't going to happen. There is now a reinforced bottom, and there are feeders there that will gobble anything up if it moves. Because of those investors, momentum to sell will never build up.

pkennedy says

Have you ever seen a riot start? Or a group of people go crazy? How about during the bubble years of housing, how many times did you hear “You have to buy! you have to buy! it’s awesome!”??
When people go crazy, they need a small break to re-evaluate the situation. Once that happens, people start to think rationally. Once they have time to put in corrective measures to block their own problems, they’ll feel more comfortable.
*THAT* is what the government did. Stopped everything, gave people time to breath and think.
It gave companies times to implement more safe guards and create new contingency plans, etc.
The selling momentum is gone. There are now investors lining up for houses, WAITING for them to drop, hoping and praying they drop because they’ve now got credit lined up, moved their wealth into cash where they can buy, etc. If they are there WAITING, it isn’t going to happen. There is now a reinforced bottom, and there are feeders there that will gobble anything up if it moves. Because of those investors, momentum to sell will never build up.

Except in west Oakland

@riobertoaribas
Where are the big banks failing?
Where are the banks without money to lend?
Where are the companies with no plans of action? Like pre bubble bursting, no one was prepared. Do you see them around now?
What companies have been reporting massive lay offs like in 2008?
What companies are reporting horrendous numbers that aren't sustainable? What companies haven't balanced their budgets?
How many people do you know now that say "I'm ready to buy..... just waiting for X to happen" vs 2008 bubble crash?

We're way better off now. There might be issues with housing, but there aren't enough issues to create the momentum required to create another free fall. We need many many many problems to hit us all at once to create that, but many have solved. THAT is what is different.

IF prices started to drop again, there would be lines of investors ready to buy things up, and home buyers sitting on the side lines waiting to buy up anything value priced.

thunderlips11 says

Simchaland, sorry man, but I disagree about the rich going down with the rest of us.

I didn't say that our elite aristocracy would crash with the rest of us. Of course they'll keep all the spoils of this class war they have been waging against the rest of us no matter what happens.

I did say our "rich country" will eventually run out of money. By that I mean that we could easily become a 3rd. World country. We're already "depaving" roads because of lack of funds. We continue to cut and gut our education system (which is already gutted and very broken) so that we continue to churn out masses of ignorant fools who are easy to control with endless propaganda and who won't be able to compete with the rest of the world for 21st Century jobs. We'll always have the very very super rich elite aristocracy. What will be different once we (the rest of us) are "tapped out" due to our love for cheap crap from overseas, we will see the rest of us join the peasants in the other 3rd. World countries making the gap between rich and poor larger and living conditions for the rest of us (the working and not working poor) similar to the living conditions of Sierra Leone.

@thunderlips11
I didn't say it was picking up, I said it had stopped falling. We are way better off now, because corporations, banks, the government and consumers understand what kind of market we're in. They'll behave accordingly. The government knows it can't cut the deficit now, so it won't try. Corporations know this isn't the time to spend large and higher expecting rapid growth next year. People know that they need to save more now, for an emergency. In 2008, this wasn't know. Not until the crash did people start changing their behavior.

@robertoaribas
I didn't say investors were willing to pay todays prices. I said they're lined up and waiting for THEIR prices. Some want pennies on the dollar, some want 10% off, some want 5% off. Whatever they want off, they're sitting on the side lines waiting. We stopped falling because investors bought enough to hold the housing where it is. If it tries to slip, the next batch will jump in and hold it. No more free fallings.

Hey all,

Recently discovered patrick.net and have been devouring the articles and conversations as a lurker, just wanted to add my relatively-naive two cents.

My wife and I are currently waiting to close on our first house. We've rented together for 11 years and found a place for sale that we love ... closer to work for both of us, close to the schools we targeted for our little girl, end of a cul-de-sac, backs to open space, nice sized lot, new roof, new windows, clean inspections, etc.

I do understand the "it's not the right time to buy yet" side of stuff (or at least I think i do) and we did have some of that "we can't wait to own our own place" thing going on, but we also felt that we had done well saving all of this time and thought the timing was right for us.

The bottom line for us was finding the place that we could see ourselves staying for a long time that felt like home. We're not in the house yet, so I can't say 100%, but it sure does feel right at this point. I guess time will tell if we made a bad decision, but right now, we are very happy with it and are excited to get through the process, move in, and make the place ours.

Thanks all for contributing the interesting theories and explanations ... much of it is above my head, but I am learning a lot here.

That's all, just wanted to add one more little note from a life-long renter that recently went to the other side.

We don't need tariffs, this isn't a tariff situation. You're talking about "cotton" quotas. We're talking about a currency imbalance which would require a tariff right across the board for all chinese goods. All that would happen is they would move to thailand. We would then need a tariff there. Then to the next place, then the next, then the next..... If we apply a tariff on every country, we're essentially just readjusting the currency. A tariff is to protect one market, readjusting the currency protects everything -- which is essentially what we need.

Indian IT workers are getting close to costing as much as American counter parts. Not quite there yet, but getting very close, unless you're Intel and hiring 20,000 and economies of scale work for you. For 30-40 workers, you'll end up paying about the same.

Chinese manufacturing isn't supposed to be that far off american markets either. I haven't really looked at the specifics, but once all is said and done, it probably wouldn't require much inflation to bring them up to par with manufactures here. The chinese need to get big enough to service themselves, and then I'm pretty sure their wages will go up and they will see that they need a better exchange rate on their side to do business over here.

I'm guessing that you think if we tariff all lowly paid countries, that we'll instantly close all the loop holes and that no one will think to look for others, or abuse other systems in importing?

A tariff system on everything isn't going to work. Cutting countries out of that equation isn't going to work well either.

When IT went to India, we needed more management here to manage those workers. So people here did get new jobs, new management jobs that wouldn't have existed. Regardless, the point is that things are already balancing out. When you open up the entire worlds work force to free trade it's going to take quiet a while to balance things out. To think that only 5-7 years ago, you could hire Indians for next to nothing, and now we're paying them similar wages? Thats a huge balance that shifted very fast.

It worked out well for us (we lived for around 18 months rent-free due to the bankruptcy and delays in the eventual foreclosure.
But, we had to move, and it’s hard to find a place to rent when you’ve got 3 kids and a dog.

Its also hard finding a place when you sit on your arse for 18 mos rent free doing nothing to secure your future. I assume your Republican values went out the door when you realized you could get a freebie just like everyone else heh?

pkennedy says

I’m guessing that you think if we tariff all lowly paid countries, that we’ll instantly close all the loop holes and that no one will think to look for others, or abuse other systems in importing?
A tariff system on everything isn’t going to work. Cutting countries out of that equation isn’t going to work well either.
When IT went to India, we needed more management here to manage those workers. So people here did get new jobs, new management jobs that wouldn’t have existed. Regardless, the point is that things are already balancing out. When you open up the entire worlds work force to free trade it’s going to take quiet a while to balance things out. To think that only 5-7 years ago, you could hire Indians for next to nothing, and now we’re paying them similar wages? Thats a huge balance that shifted very fast.

And how would you blonde eyed, blue haired crooks know what a "Indian" is making?

Dey Tuk Our Jurbs!

@john
When renting, depending on the landlord, you could end up with something broken for a very long time, and/or patched up 50 times before it's ever replaced. When owning you get it done under your control. There are always landlords who are great, but the ones who survive and flourish are the ones who figure out how to do things as economical as possible!

Generally owners are less transient and more vested in seeing their neighborhood taken care of as a whole.

This is a BALANCE SHEET Recession, I just listened to awesome interview on Bloomberg (Aug 21st 2010) I hope some if not all of you give a listen, I really found it one of the best I have heard in awhile. Link here,
http://media.bloomberg.com/bb/avfile/News/First_Word/v8YrmQNUbHXI.mp3

Homes are great places to dump extra money. The renovation trap begins right away, even if you move into a brand new house, you have to "upgrade." I went from owning to renting, and my monthly expenses dropped by 50%. It is not just the extra money that I saved by paying less rent than my two monthly payment. Certain utilities were included, and of course, so was the property tax. I am not sure that "color" is a good enough reason to start paying double again, because it would be my money going into buying the paint. I am growing fond of white.

cvoc13,

SInce you think oil will become so dear, I hope you are a renter in Brentwood, and not a mortgagee.

Thomas,

Some people told me when that happens it won't matter so much because the Bay Area will already be thriving on "The Next Big Thing" that Silicon Valley comes up with. Some have put as much faith into the Coming of The Next Big Thing as fundamentalist religious put into the Coming of Christ.

I am more skeptical about it.

Next Big thing ? In terms of the IT ... Doubtful. SV has done its thing. Thats over now.

If you want to consider the next big thing, try growing hemp genetically changed without THC content which could be used for cheaper paper substitute (Pulp), cheaper and much more cleaner and eaily replenished bio fuels, and of course cheaper fabrics. This can be done almost anywhere domestically and would create its own new industry.

The "Big Needs" which require cheaper substitute is where you will find the "Next Big Thing". This is the lesson you can draw from SV success.

Thomas,
the "Big Thing" for tech in what became the Silicon Valley region was for a very long time defense. Had nothing to do with cost reduction/enabling deflation. If anything it was the opposite, probably the reason my then-colleagues for a time referred to the venue of their lifelong employment (or at least at the time they had faith it would be lifelong) as "the lazy-L".

You could lower the prices of all the TECH equipment in, that is SUCH a fractional part of ones budget as you don't buy a laptop everyday, or every month, once or twice every couple of years, (Durable equipment) if you are meaning that because the costs go down on tech. that will cause the companies to make less profit, and therefore pay less etc... the profit margin will still be high. BA prices are going lower over the next 20 years (much like Japan, and no one thought it would happen there either) I think the stock market will be making new lows in the next two years (sometime in that time span)

As to if I am a renter or mortgage holder, I used to be a mortgage holder (twice, I have been a home owner since 1982) Back in 2008 I downsized from 3000 Sq. Ft. to 740 Sq. Ft. apartment and I love it when compared to the hour drive each way, and the taxes, unexpected repairs (even though I bought new home) Fuel jumped up and my fuel bill went sky ward. Now that I rent 7 miles from work, quality of life went way way up, costs way way down, and I see a new trend of both wanting to make a smaller carbon foot print and or need to use less, (as costs will be high to use any and all resources, fuel, food, raw materials) are all going higher. So between the want, and need to use less, go smaller, and live more responsible as a population. Loans are going and should be HARD TO get, I would love to see 50% req. and 7 year max that way we could work to live and not work just to have a house, and in fact two working to have just to have a house.