What infuriated me was that it was obvious that we were in the "boom" part of a boom-and-bust cycle. I'd seen it during the late 1980s in New Jersey's Route 1 corridor, as well as in my former hometown of Toms River. Housing prices went nuts then, and 10 years later, houses were actually worth much less in straight-dollar terms, not factoring in 10 years of inflation.
So when the price of a rowhouse in Roxborough went from $70k to $180k in a couple of years, I was a little surprised that people really hadn't learned anything.
Me, I was naive. I had assumed that when interest rates went down, housing prices would rise a little, but that meant extra cash in our pockets because our loans would be lower. But I didn't think people would actually bid up the price so that what would've been interest became principle -- and more.
It never occurred to me that people would pay twice as much for a house as it was worth a few years earlier. It never occurred to me that a critical mass of people would do so, forcing the disciplined buyers out of the market, though I was quickly disabused of this notion and filed it under "extraordinary popular delusions and the madness of crowds."
I moved to the Poconos rather than take on a hundred or so extra thousand dollars in debt. That was debt that I might not be able to repay if housing prices went down. I recalled in the early 90s, after the last bust, many people had severe negative equity in their houses. They were at extreme financial risk if they got laid off. Some did, and ended up having to sell their homes without being able to pay off their mortgage. They are now forced to walk the land, homeless wanderers, twitching and muttering, bearing the mark of Cain. (All right, that's a little over the top.)
All this is to say, I don't feel sorry for you if you end up with severe negative equity in your home.
Not that any of the readers here would do that. The readers here, after all, are not mad followers of popular delusions.