Average wage for Cambridge is likely to be much much lower than NYC or SF.

Compare to London, where the average deposit needed to buy a first home is £91,000 ($130,000) -- 25% of total price.

What's wrong with a 25% down payment?

You really shouldn't buy a house with less than 20% down in the US, either. It's just that some banks have looser financing (and higher interest) to allow 15% or 10%, and there are government programs that subsidize first-time home purchases to allow a 3.5% down payment.

Nothing's wrong with a 25% deposit. But the size of that deposit - $130,000 - is pretty high for most people buying their first home.

They need to save that money while also paying rent and paying off student debt.

FHA 3.5% for the win. I went from paying $1300 in rent for one unit in a duplex to paying $1800 in mortgage/insurance/taxes for the entire duplex, and I get to charge the $1300 for the other unit. It's a no-brainer.

My buddies in middle-America were capitalizing heavily off of both the FHA and the incredibly low interest rates circa 2011 (thanks artificially depressing the dollar, Fed!). They started out with a handsome amount of capital and borrowed against their 401(k) [I don't recommend this] to speculate on the rise of land [I also don't recommend this], threw down 20% to avoid PMI [I do recommend this, if you can afford it] and started renting out properties. They essentially speculated on gentrification, got lucky, and pay a management company to maintain their properties so they don't even deal with their tenants. Their bi-monthly involvement is limited to reconciling their accounts for 20 minutes and a five minute phone-call to resolve any potential outstanding issues with the management company.

What does the FHA have to do with anything if they were putting 20% down payments on the properties?

> Compare to London, where the average deposit needed to buy a first home is £91,000 ($130,000) -- 25% of total price

The deposit required is more like 5-10%. I think a 25% deposit is pretty rare for a first time buyer. Of course this still means you need the income to afford the huge mortgage.

Are you getting confused with the average deposit used by purchasers?

rent is a much bigger part of salary in UK than it's in US. the salaries, mainly in tech, are pretty bad around here.

I'd say the majority of the people renting in Cambridge are from academia, and they cannot afford decent flats. This is quite absurd, because there's plenty of space. Cambridgshire is all marshland and low-value farmland.

Cambridge is basically a village though, which makes it insane.