[jacv]

I don’t think I agree with you. I don’t know of a lender offering 0% down loans for people in those markets (the only thing I could find was VA loans or USDA), but could be wrong.

For a large portion of people, monthly cost is not the big problem. A 20% down payment on an median home price of $850k (Seattle), $1M (LA), $1.3M (SF) (all these taken from google’s results) is because it’s very hard to save that much money when you’re paying median rent of $2.7k (Seattle), $3.3k (LA), or $4k (SF) (Zumper, 2bd apartment).

All else equal, I think a lot of people when trying to buy for the first time would prefer lower house purchase price with higher interest rate because of saving for a down payment vs the same house at a higher price and lower interest rate.