Higher prices aren't good by themselves, what's supposed to be good is continuous appreciation. If we knew for a fact that home values would always go up relat

Higher prices aren't good by themselves, what's supposed to be good is continuous appreciation. If we knew for a fact that home values would always go up relative to inflation, the sticker price of a home wouldn't matter all that much; as long as you could get: * a loan with a long enough lifetime (so the payments are feasible) * a loan with a low enough interest rate (so the increased value of your home equity isn't overtaken by the amount you give to the bank) * some nice government subsidies in the form of the mortgage interest deduction then at pretty much any point over the life of the loan you can sell the property and come out ahead, even if you never finished paying it off. Of course, if the crucial assumption that home prices always go up turns out to be faulty, anyone who bet on this strategy might be left with a home that's worth less than a loan they can't afford. Disclaimer: I think I understand the concepts here but I'm no expert. Apologies if my choice of words and/or logic are completely wrong.