Call us crazy, but we think the current housing crisis is going to have at least one major positive effect on this generation of home buyers. Up until now, our generation has been buying a new home and living in it for an average of five to seven years, then moving on to new homes and new home loans. The problem with jumping from mortgage to mortgage like that should have been obvious, but to many of us, it simply wasn’t.

Too often in our society, we figure if we can afford the payments, it’s a good idea to buy something. In real estate particularly, we’ve been encouraged to indulge ourselves by getting the absolute most house we can afford. Of course, when interest rates go up, we’re screwed. But on the bright side, we were able to live it up for a little while.

The mortgage crisis, of course, has made it much harder to obtain new home loans for most of us, unless we can prove definitively that we don’t really need the loan. The positive effect of this is that we’ll have to live longer in the house we have, making do with it while we pay down the mortgage.

Our parents and grandparents mostly bought a house with the idea of living in it for the entire time they raised their families, then maybe selling it and buying one more house. Usually, they would buy a cheaper one and keep the difference since children had grown and moved out.

Staying in the same house for that long allowed them to actually pay it off (I know, a novel concept). These days, what most of us have been doing is trading up for a bigger mortgage every few years. The problem with that is simple. For the first half of your mortgage, most of what you pay is going to interest. That money is gone with the wind, just as surely as if you had paid it in rent.

Only a small percentage of our mortgage payments actually pays down the principle on the loan and builds equity for us. But, if you stay in the loan for its duration, about halfway through the equation flips and suddenly you are building equity very quickly.

So consider this. After the storm is over, and everyone else goes right back to trading up for a different home every five years or so, stay in your home until you really need to move. Then someday, you may actually own it outright. Believe us, it beats the hell out of paying interest on home loans.

Photo via chascar