Thought experiment: 1) Prices keep rising. Existing home-owners refinance (cash in their pocket). People who can't afford their mortgage default on their loan.

Thought experiment: 1) Prices keep rising. Existing home-owners refinance (cash in their pocket). People who can't afford their mortgage default on their loan. People who can't receive a mortgage are forced to rent, leave town, or sleep in their cars. 2) Will the housing bubble violently explode? Or just slowly deflate? Teaser rates and CDO obfuscation were the reason the housing market exploded in 2008. If we don't have any of that in 2018 (just good ol' fashioned lack of supply and overly-levered, synthetic housing demand), then a violent bubble explosion would need to happen for a different reason. 3) People seek semi-legal alternatives. Living in cars. Living in tiny homes (mostly illegal by zoning in major cities). People leave the USA to work remotely. The pressure cooker is boiling and I'm keeping my money on the sidelines. I would much rather live/work "non-traditionally" than corner myself into a mortgage I ultimately can't pay.