The other element is leverage. If you put 20% down (which is higher than average), you are levered 5:1. If all houses double in value, your equity goes up 5x. (Example: $100k down on a $500k house; price doubles to $1mil, your equity is now $600k; you can now easily afford 20% down on the higher price house, despite the fact that it is now $2,000k from $1,000k when you started the process.)