Yes, you personally are much better off with no money down (0% equity) and a long-term, fixed rate, tax deductible, low interest and non-recourse mortgage loan.

Yes, you personally are much better off with no money down (0% equity) and a long-term, fixed rate, tax deductible, low interest and non-recourse mortgage loan. You control the asset (the condo) but have very little downside risk. If prices fall 20%, even if you kept your job, even if you won millions in the lottery, it might be in your self-interest to walk away and let the bank foreclose. I don't think there's a moral dimension to that decision; it's a matter of contract law. But I am pointing out that this is a tragedy of the commons in that millions of people acting this way creates an environment in which downside risk is hugely amplified in the event of significant price declines in the housing market, which is what we saw in 2008 - the system beginning to feed on itself in a vicious downward spiral. When I read things such as your initial comment a little voice in my head says ''here we go again''.