This morning on NPR's Morning Edition (I know, I know, I shouldn't be listening to that poison), they had a story on renting versus buying. The gist of the story was that it made sense to rent rather than buy because of the "housing bubble". The three housing markets they looked at: Boston, San Franscisco and Washington D.C. One of the lines from the NPR website is, "A look at the financial choice many people face." Typical NPR.

Meanwhile, in the real world, US homeownership is at the highest level ever, over 68%.

Thank you, FDR

You're welcome, Harry -- William J. Levitt

he: what has fdr got to do with the housing market today ?

When the current housing boom goes bust, I can't imagine the net effect on the economy of wiping out a couple of trillion in unrealized paper wealth. We saw this in Japan in the late 80s.

Keep in mind that Japanese housing prices are lower today than they were then. I wouldn't even think about buying a house now, because it won't appreciate for a decade.

Housing prices are a function of monthly payments. When interest rates go up, and they are going up, the amount of money one can borrow on a given monthly payment will go down, thereby reducing the price of housing. Anyone who follows the real estate market closely knows that there are a lot of mortgage products out there that are in a word 'dangerous.' There are people putting nothing down, getting an adjustable rate or a negative amortization mortgage and hoping for the best. Their lenders should just file the foreclosure complaints now to save time.

For a bottom feeder like me, the next decade could see a real windfall.

Where are the additional 200 million Americans going to live?

In tents next to the Wal-Marts and McDonalds where they will be working because the vast bulk will have little to no skills.

Skills are easy enough to acquire, after all, no one learns to be a meat cutter in school.

And if I can bring over an experienced Mexican or Belarussian meat cutter for $7/hr instead of hiring an American at $10/hr and training him on the job, when he gets paid $15/hr what then?

What will happen is that more and more Americans will live in multi-generational housing models. That was how we lived in the 19th century and we'll do it again. It's also how much of the world lives, particularly in Asia.

I meant the Mexican. Working his two 40hr jobs with a working wife he can easily afford a house not a tent.

And that will help insure social peace in America, NOT!

Ownership is the greatest guarantee of peace we know of.

Living someplace with a mortgage at 115% of appraised value is many things. Ownership is not one of them.

If Americans have to adopt foreign ways of arranging their living quarters because people come into the country and drive up house values making it impossible for them to afford housing the way their parents and grandparents could, there will be major strife. It has been quite difficult enough for our society to be mostly two-income families, we see its effect on juvenile behavior and divorce rates for example. If we had to start sharing houses with siblings and their families or with parents and kids and their families, things could get really ugly.

Societies where things appear to be getting worse instead of better are headed for disaster. Perception matters.

Fortunate then that ours has been getting better since 1980.