- If it sounds too good to be true, it probably is. Turning to homebuyers, many people bought more house than they could afford, thanks to adjustable interest rates that were expected to remain low indefinitely.
- What goes up must come down. These people also believed that rising home prices would enable them to pull equity out of their homes, while refinancing into a fixed rate. But as we now know, nothing rises forever.
- Home is where the heart is. Forgetting that a home is first and foremost a place to live, many people began thinking of their houses as investments and as piggy banks, and thus made decisions that they might not otherwise have made. Even to this day, some homeowners think it is wrong to owe more on their mortgage than their house is worth; that's why they walk away from it. Hello? Don't they realize that they need a place to live?
- What, me worry? Home prices have gone up every year since the Great Depression, so it's OK for me to spend more than I earn, since all I have to do to make up the difference is to take out a home-equity loan.
- This time it's different. There may have been bubbles in the past, but it can't happen to housing, since all real estate is local and, at any rate, people need a place to live (See Home is where the heart is, above).
What flavors are we drinking now?