Isn't the down payment delta pretty significant? Having to save 160k instead of 40k for a 20% down payment significantly delays the point at which a millennial household could start accruing home equity, feel confident about starting a family, etc.
In a very real way, the 'starter home' became a 60/40 equity/bond portfolio plus a rental unit.
Between that and FHA as a peer comment pointed out, folks could actually be quite a bit better off today in spite of the bigger sticker - and yes, in spite of PMI (generally only 0.5% to 1%) which can be waived once you reach 20% LTV. (2.5% + 1%) is still way - way - lower than the 18% rates we saw in the 80s.
That's why I said housing deserves its own post, rather than letting it get lumped into with the chart crimes.
Owning is not always better than renting (although it can be). The biggest driver of the delta between owning and renting is actually the opportunity cost associated with not investing the down payment into the equity markets. The point at which folks buy has shifted older, yes. That isn't always a bad thing. A higher down payment is still your own capital. You get it back when you sell.
You don't get the same optionality if you buy with interest rates at an all time low.
Housing affordability is actually at an all-time low right now, close to 1982 levels, after the interest rate rise.
https://www.atlantafed.org/center-for-housing-and-policy/dat...