Bull or Bear??, page-90

I don't think your example is very good because of the variables in living costs over that period . I assume that what your trying to say is that the house won't have the same dollar ( or purchasing ) value in 15 years time . If that were to be the case , the growth of the house price would need to be less than the inflation rate over that period . If that's what people believe , I don't know why they don't just say it that way ? It seems so simple .

As for your long term view , why do interest rates have to go back to 17% necessarily ? As you point out , if they went to 17% tommorrow , no one would be able to afford it . So it makes sense that in a way the market will regulate itself and it is unlikely that we will see those rates .
The otherside of that argument is that when rates went to 17% , people could afford those rates because history shows that they did . Once again , market balance ( sort of ) .

If you want to compare prices to your grandparents time then you would have to make sure that all the other factors you compared were the same e.g. income earners per household , education levels , house size , availability of finance , family size etc . As you can see , the two periods are vastly different in all facets .

Back to the original increase in wealth discussion . You could choose to not buy a house and be a lifetime renter . Provided you were disciplined and invested the money that you saved , there is no reason why you couldn't do as well or better than real estate . Trouble is that you would have to be disciplined and make sure that your investment products were at least matching inflation and hopefully beating it . Remember that you're relying on those investments paying your rent in retirement .

Is that what you are going to do ?