That's exactly why I don't like these "reverse mortgages" you hear advertised on TV. Basically, you sell half of your house back to the reverse mortgage company for whatever the price is NOW. Then 20 years from now, when you pass away, your estate only collects half of what the house sells for. The reverse mortgage company you deal with pockets the other half.

When I was a kid, people built houses for $25,000 dollars. Those same houses are now selling for 10 to 15 times as much.

People buy houses now presuming they're going to increase in value, and it's exactly that presumtion that causes prices to go up on houses. Each buyer figures he'll get more when he sells it than he paid, and so the prices continue to rise with every flip. But, that situation is unsustainable. Once the baby boomers that were born after WWII start going into the nursing homes and cemetaries, their homes are going to go on the market, and there will be a glut of houses flooding the market. Then, prices will start falling, and all of the people that bought houses as investment will try to sell them for what they can get, and that will cause the situation to get even worse.

If people considered houses to be a commodity, which is what they are, which is something you buy as you need it, like food, clothing and fuel, there wouldn't be the steady increase in housing costs that attracts investors, and there wouldn't be the volatility in housing prices that we see.

Back in 2008, there were thousands of people that bought houses on a "teaser" zero percent mortgage. The mortgage would stay at 0 percent for three years, and then jump up to 6 percent. Lots of people figured "Great, I'll just keep this house and let it appreciate in value for three years, and then sell it." It was those same people that are now deeply in debt because their mortgage went upside down. The value of their house fell below what they bought it for, and now they owe the banks money on a house that's been foreclosed on them. Terrible investment.