I think you oversimplify things and make assumptions that contradict your argument. The negative amortization loan scheme works only if you intend to sell the house after it appreciates to the point that your gain will be higher than all incurred transaction costs (i.e. interest added to principal, plus selling cost, plus fees and taxes). Yet your parenthetical remark about buying one's own house implies that people do it to have a home rather than to acquire a real estate speculation instrument - which in turn implies that they are unlikely to sell when the market situation is right.
In short - it may be good speculative instrument but not so good housing policy.
Another, even more serious, problem is that these seemingly miraculous get-something-for-nothing housing schemes divert attention from alternative housing policies that are less risky and more affordable, albeit not as profitable, to loan sharks and real estate intermediaries - such as housing cooperatives.
This epitomizes the quintessential problem of the US monopoly cum high transaction cost capitalism - that it presents itself as TINA while better and more efficient alternatives are abound.
Wojtek