I used to work for a mortgage company, so all this stuff I've been hearing lately about a housing bubble really strikes a chord with me. I saw loan after loan go out to people who really couldn't afford them. They'd get LIBOR ARMs, interest onlys, 100% financing with a massive balloon payment, all the tricks in the book. Default rates are going to be sky high over the next decade or so. What does that mean for me? Well for one thing, interest rates are going to rise. Banks are going to be facing so many foreclosures that they'll sell for dirt cheap, but make you pay for the savings with interest. Fine with me. I'd rather have a smaller principal and higher interest since I don't plan to buy a house until I know I can make at 125% of my monthly payments every month, which means I'll pay the whole thing down so fast the extra interest won't matter. And all these $700k and up homes that people are leveraging their futures to pay for will cost more like $350k. I'm thinking it's going to be a great time to be a first time home buyer in about 5 years, which should be just about right for me.