Haven’t run the numbers to agree fully with your final argument, but you bring up a crucial point:
“If…you have a mortgage that you can afford”
And I would add, that should mean – afford without going into credit card debt to buy groceries and gas, afford without counting on an annual pay raise, afford if you were to face a financial setback (temporary job loss, illness, etc.).
I find it hard to buy into the idea that as a professional in my mid- (ok, late-)twenties, high income for my age bracket, stable profession, virtually no debt, I am priced out of the housing market forever (and I am priced out, and have been for a while, no matter what a mortgage broker would say). It just doesn’t make sense.
I’ve watched too many of my peers get in over their heads in the past few years. Dealing with the headache of having (and finding!) multiple roommates so that they could make their mortgage payment. Sacraficing all the fun stuff, or going into crazy debt to avoid the sacrafice, all for home “ownership” (or in some cases, because they’re convinced they need the tax break, but that’s another rant).
Of course, everyone has different situations, different priorities, and I haven’t always made the best decisions either, but I must say it’s pretty nice that I’m living comfortably, watching my savings build, and I haven’t had to eat Ramen Noodles since college.