Hi R. Shawn McBride Thanks for the comment.
You’re right, the gains in real estate prices are on 100% of the house not just the down payment. This methodology accounts for that but uses a 3% expected return on real estate.
As you point out the major factor will be how much real estate prices increase. They might increase by more than 3% per year in the long run (in some markets) but I don’t think it’s reasonable to expect that most of the time.