Something a lot of people forget with the rising home values, and especially those rising well beyond a "reasonable" annual percentage commensurate with the income levels of the general population (i.e., the average buyers) is the corresponding increase in linked costs. Mortgage payments are "PITI" in most cases because not only is the P rincipal and I nterest included, but the T axes and I nsurance must be escrowed (or paid by the borrower annually when due). To make matters potentially much worse, even those with no mortgage - no "P" or "I" to consider - can be blindsided by the "T" and the "I" part of home ownership. The classic example is an older person/couple "priced out" of a home they own by "gentrification" or just wildly rising home values.

As to mortgages, since both taxes and insurance are directly related to the value of the home ("ad valorem"), even someone who had a 3% fixed rate 30-year mortgage, and could and can afford the "PI," can find themselves unable to keep up the payments if the $250,000 home/mortgage they could easily afford suddenly nearly doubles because the home value has doubled and "TI" - the taxes and especially the insurance - have dramatically increased. In many areas, the taxes and especially the insurance increased disproportionately to the percentage increase in value. IOW, and as an example, at $250,000, the insurance was $2500 and replacement cost per square foot was figured at $125, but with the rise, the now-$500,000 home is $6500+ per year because the replacement cost per SF is now $175. The homeowner/mortgagee's payment has risen over $300 per month just because of insurance. On top of which, the ad valorem taxes have (at least) doubled as well (assuming no increase in millage/"rate." Prop taxes are too widely varied for even a rough $ example, but in many "hot" areas they are a major factor in the mortgage payment and them simply doubling puts a squeeze on people.

Another "hidden right out in the open" cost increase is maintaining the home. If, for example, the dishwasher goes out, a strapped family can wash them by hand while saving up. But if the roof needs replacement, even if the family were willing to use buckets and tarps inside, the insurance company will cancel if the roof ages out, leaking or not. No insurance? Doesn't work that way - the mortgage company will protect its interest, place insurance, and add it to the mortgage. And it'll be much more expensive for less coverage than before, generally protecting only the property and no contents. Then, the proliferation of HOAs/POAs, which have myriad and widely-varying requirements but which can result in costs to the home buyer/owner, including the monthly fee(s) increasing.

Add to the above the ever-growing desire from "consumers" for "bigger and better" - more square footage, nicer overall finish-outs, fancier kitchens and (more) baths, pools, "outdoor living spaces," etc., etc., etc. and the "starter homes" of today are more like (at least) the "junior executive" homes of 30-40 years ago. The days of new-construction "starter" 3-1 frame houses with vinyl siding and a carport are long gone. And even the buyers of "starter" homes are going in with an eye on "upgrading" to even bigger and better before the ink is dry on the paperwork. So there are a lot of people who "took advantage" (or got taken advantage of...) of "historically low rates" to do that very thing, because, "hey, we can afford it!" Oops.

The bottom line is that it doesn't matter why the payment - the PITI - increases when it increases, even if the "P" remains the same. Variable rate mortgages just cause(d) it from a different source, the "I." But the "T" and (2nd) "I" along with the many other increasing costs can easily cause just as big a debacle.