If the median home is about 500K now and you can save 30K/year, on balance you won’t be too far behind even if the market goes up 2-3%/year for next five years. Worst case over 5 years, you lose 50K in appreciation but save about 150K plus earnings (from work) on the investment (say 20K more). Then you would have 270K to work with even if prices are at 550K, they will still be fairly affordable to you. And when you buy, you can buy what you really want and not worry about trading up. One negative is, the property taxes will be higher by 1% of that amount (difference) for all years going forward.
I think the mistake many make is thinking the patterns of the past will repeat.
It is much harder to get loans now and investors who get used to monthly steady rent payments probably don’t want to sell out and put their money in CDs or govt bonds which pay less. Stocks are close to an all time high, so that’s not so appealing too from a value standpoint. While there are some negatives out there like low wage growth, on balance low energy prices, low inflation, low interest rates and other commodity prices should allow for reasonable growth in the US in the next few years.
A good realtor should be able to find you a short sale, there are still some out there or a pre foreclosure. It may take some work, but if you want your 10%, that’s how to do it.
