1) There is an excess of housing in US.
2) Populations will follow access to healthcare and jobs.
I strongly feel housing will decline or be flat for the geographic majority of the US. If you are willing to relocate I think you have nothing to fear about housing costs (excluding prop tax) in US... If you are insistent on living in NYC or SF then you will have supply and demand to deal with. To each their own, but I would not sacrifice 10 years of my life to live in a specific place, when most are usually pleasing to me.
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Strange it's such an emotional issue, for me it was simple. After cash purchase owning (+associated costs) is about 20-35% of what renting would be. These savings will cover the purchase price less than 5 years... Buy ugly, buy at auction, shoot for under 70% of list (or comparable lists).
Rent is pretty much determined by wages (as Jacob has pointed out), housing prices are not... So many people pay 200%+ of what rent would be for the delusion they "own" the place. Insane and rental returns are almost always abysmal in these areas.
OTOH, many people continue to rent when their rent would pay off the house in a few years. Usually this is because they have no access to any credit or cash... Rental returns are usually very good here, but there can be a lot of headaches that come with people who have poor credit and no capital.
@jennypenny: It seems to favor homeowners when everything is rosy. I know of a lot of governments that have attempted to close budget shortfalls (falling revenue) with property taxes alone.
The week after I sold one of my rentals I got a re-appraisal from the county saying my taxes were going up 160%. Good timing me
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