Current homeowners are in a much better position than are first-time buyers. If nothing else, current homeowners can continue to hold the house they’re in now and watch appreciation create wealth. But for many of these people, appreciation is a double-edged sword. Yes, it increases the value of their home, but it also increases the property taxes they have to pay each year.
Current homeowners are also more likely to be in the upper half of the income distribution. That means they can afford a higher payment and the ever-increasing tax burden, which could increase their monthly payment every year. [As a side note: don’t think you avoid property taxes by renting. You still pay your landlord’s property taxes; you just don’t get to deduct them.]
Finally, current homeowners can roll the equity in their homes (garnered through payment and appreciation) into their next home purchase. If they need (or want) a bigger home or one in a more expensive neighborhood, that equity helps them keep their monthly costs down by providing a larger down payment.