I'm not sure exactly who you're talking to, but mine is $700 including tax, with a 20% downpayment, and it's in a nice, green, quiet suburb.

Ranchers\Bungalows in my city run on average between $125k and $160k.

IMO the trick is to get in early, make sure you've bought a house at least by the time you're 25. Pay a mortgage for 10 years, do some cosmetic upgrades, sell the place, and then you've got a nice chunk of cash to use as a downpayment, and you can get yourself into a nice, comfortably low monthly payment.

In all honesty, I could have gotten my new monthly payments down to 400 if I'd gotten a 1 year rate, waited for my current place to sell, used the downpayment and refinanced but I decided 10 years at 3.6% was too good to pass up, as interest rates are all but guaranteed to go back up over the next few years. So this way I'll just use my cash from selling my old place to make yearly balloon payments and get the new place paid off asap.

I only spent a few years of my life renting, the rest with a mortgage and it's paid off. The later years are where you're really going to *need* low or NO monthly housing costs, and it's pretty easy to work it out that way as long as you start early.

I know people who are in their late 50s who don't have a cent worth of real equity or a paid off house to live in, and they are pretty much buggered once they retire.