Additionally, the supply of homes for sale is constrained because of this and will be for some time putting upward pressure on prices in most markets.Thinking about renting your house in Seattle would be wise as someone else will pay the mortgage down, and rents and the value of the property will go up over time.

The rental market is pretty rough here in the Austin area due to a glut of supply.

Rent growth is a function of supply, demand, and interest rates:- I'd ground any forecast by stating I expect national rents to rise on a pace more or less in line with inflation over any long time period. 2-3% per year.

That is smaller units built with higher density to make the numbers work for both buyers and builders.Adapting to these challenges isn’t easy, but it’s necessary to keep up with the market.What are your thoughts on how builders and developers can address affordability and supply issues. 

There’s just not enough ADU supply (IN MY AREA) for appraisers to base off of.

Depending on the number of jobs and number of new development going on in the area it may just be simple supply and demand.

And the reason why your "tale of two halves" will play out as you described.Demand:  This has actually been high almost all along, but rent growth hasn't materialized in response due to high levels of new supply. 

The supply of rentals would be impacted, but the final impact will depend on the local market.

I realize now that I should have supplied numbers initially- for numbers I am looking for $650k and under.

The money that you end up owing to repay the loan over the 5 year term is now post income tax money unlike how you traditionally are supplying your 401k with pre-tax money.