If you don't borrow to buy, you are doing it wrong. Borrow $400k for a $400k house, paying $28k in interest, $10k in carrying cost, and charging $3k for rent. Though, I used unfavorable rent, and a high carrying cost, so I'm sure you'll take exception at the rental price. The numbers aren't far off for many places. A $300k house in Anchorage will rent for $2300 per month.
Google says 280K in interest, not 28K @ 3.92% interest over 30 years. Just Google "interest calculator", and Google displays their built-in interest calculator.
If interest rates ever normalize - even go to 5%, interest jumps to 373K - about the price of the house.
The goal with a rental is to break-even cashflow. The market will go up 100% in 7-15 years, and you will make 2-5% above inflation with more "guarantee" than any other investment with those returns.
How much people can borrow determines how much they pay for real estate, for the most part. And there's evidence we're at peak debt now. There are two measures - the absolute amount of debt, and how much people have to pay to service their debt. That second measure, the debt service ratio / financial obligation ratio, put out by the central bank, is paradoxically at historical lows. Credit low interest rates for that I suppose, or it's just flat out inaccurate, as the About link admits it's difficult to measure.
There's also competition with big all cash investors, though they're down to around 36% of purchases at this point, which drives up prices.
You can speculate on a 100% increase in the next 7-15 years, but that's a rearward looking indicator and the central bank and government have already done a tremendous amount of intervention already, between the bailouts and quantitative easing (lowering interest rates plus buying mortgages and government debt with printed money). Will it continue? Who knows, I'd say it's a 50-50 shot, provided the distortions they're introducing (namely that low interest rates spark asset bubbles) don't break something.