When you’re talking about the price of the most expensive purchase most people will ever make, it seems like house owners (around 2/3 of American households) would be quite interested in the topic.
First-time buyers benefit from both the decrease in down payments and the easier ability to pay down principal as nominal salary grows and/or if interest rates fall during the mortgage term.
Sure, but I think the point is that a perspective home buyer ultimately rationalizes the cost with monthly payments. It is harder to wrap your mind around paying, lets just say, $500,000 over 30 years as compared to paying $1,300 monthly. When your considering purchasing a home and how that relates to your budgeting, a flat $500,000 over 30 years is meaningless compared to, okay, this is how much money will be going out of my bank account each month.
When I buy a car, I don't think of it in terms of $20,000 over 5 years. I think of it in terms of $350/month over 5 years.
In a market where sellers have an advantage over buyers, buyers have to compete using the highest monthly payment they can afford which allows them to pay the highest price for the home to outbid other buyers.
But outside of that type of market, buyers are not trying to pay more for a house just because they can afford a monthly payment.
First-time buyers benefit from both the decrease in down payments and the easier ability to pay down principal as nominal salary grows and/or if interest rates fall during the mortgage term.