Every now and then, I like to buck my New York City roots and pretend for a moment that I might be an optimist. It happened this morning, while I was reading the monthly Housing Affordability report from the National Association of Realtors. Apparently, Americans are spending about 22.3% of their monthly incomes on their mortgage payment. That's down from a high of 25.1%, back in July of last year.

Excellent news, I'm thinking, because prices of homes are coming down, especially in the big cities, like Washington, DC, where I live. So if home prices are coming down, affordability is increasing and sellers are desperate, well then I'm getting online and getting me a bigger house! I mean, isn't that what all these great reports from the Realtors are telling me??

In fact, in their monthly Existing Home Sales report, the NAR President, Pat V. Combs, writes, "Long-term financing remains favorable, but interest rates are rising. Although some buyers have a wait-and-see attitude regarding home prices, they should consider that rising interest rates later this year could offset a lower sales price when you get down to the monthly payments."

No "wait-and-see" attitude here. I'm all set. I've got my eye on a five-bedroom Victorian in Chevy Chase with an eight-burner Viking and a spa tub for two in the master bath. Come to think of it, it kind of reminds me of the Serenity Aquatics IX air-jet pedestal tub I put in my current bathroom when we did that renovation last year; you know, the one we paid for with that massive home equity line.

I mean, we didn't really need the home equity line, given that the monthly payment on our adjustable rate mortgage is so gosh-darned low, and given the fact that we put barely any money down on the house. But since all my neighbors were busy taking out $1 trillion a year in home equity since 2001, I didn't want to be the only one on the block who didn't, right?

Okay, wait, what was that thing I heard myself say last week on TV? No, not the thing about home prices falling nationwide for the first time in several decades; that thing about tightened lending standards making it tougher to get those great "exotic" mortgage products... And that thing about the bulk of the adjustable rate mortgages sold during the boom being about to reset... And if home prices in my neighborhood are lower, then how am I going to get enough money for my current house in order to pay off the mortgage and the home equity line? And what if I don't sell before my 20-minute ARM resets to that far higher monthly payment?

That's the thing about "affordability." It can really bite you in the… wallet.

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