San Francisco ? Once a frustrated renter, Chris Economou is now a happy homeowner, enjoying a splendid view of San Francisco and an $80,000 increase in his property’s value since he bought the one-bedroom condominium for $435,000 a year ago.

He credits his good fortune to an interest-only mortgage, an increasingly popular – and risky – loan that enables borrowers to lower their monthly payments enough for several years to afford rapidly escalating home prices in expensive markets like the San Francisco Bay area.

Economou estimates he saves $1,000 a month by having his interest-only mortgage instead of a traditional 30-year fixed rate loan.

“I’d still be looking at renting for a long time,” if not for that mortgage, said Economou, 33. “Home prices are so high that it’s about the only way young people like me can get into the market.”

Built on the assumption that home prices will continue to rise, interest-only mortgages represent a gamble that many home owners accustomed to conventional fixed-rate loans would never take. Unlike conventional 30-year mortgages, interest-only loans typically don’t require payments toward the principal for three to seven years, substantially lowering the costs of entry and making it easier to qualify for the loan.

Chris Economou enjoys the scenery from his one-bedroom condo in San Francisco, which he bought for 35,000. It has turned out to be a great move so far, as the condo recently was appraised for 00,000. He couldn't have done it if he hadn't taken an interest-only loan, which provided him with a lower interest rate and lowered his monthly payments by about ,000.

But the financial firepower of interest-only mortgages is affecting all home owners. They are further elevating already lofty housing prices, a trend that’s raising fears of a crash that could plunge the economy into a recession.

“When this market adjusts, it’s going to be painful,” said UCLA economics professor Edward Leamer, who has been warning of a California housing bubble for three years. “Borrowers are getting in over their heads and lenders are, too.”

The growth of interest-only mortgages reflects a fundamental shift in the way many Americans think of their homes. Rather than places to grow old in, they see homes as part of their investment portfolios – in fact, a much better bet than the stock market in recent years.

In California alone, homeowner equity has grown by a whopping $1 trillion since 2000, according to the California Building Industry Assn.