The new article on the front page uses per capita income, which is generally quite a bit lower than household income, which is the income figure usually used in the housing price ratio.

SD’s always been high – 4-5x household income is pretty much the average for the past 30 years (discounting this particular bubble).

IMO, you can thank “stated income” no or low doc loans, combined with option ARMs, low teaser rate ARMs, and IO payment loans for the massive run up in household price ratio – no bank would ever make a 10x income loan, but they were willing to turn a blind eye and give a wink during the run-up as long as the buyer was willing to lie and say they made enough to afford it. The banks drank the kool-aid too, and figured that as long as the borrower could somehow afford to pay the teaser rate IO payments that the house would appreciate, the buyer would refinance (or sell), and everyone would continue to make money hand over fist.