They can’t afford to buy at this time. A small percentage with above average incomes may be able to afford a starter home, or they got money from mommy and daddy, etc. But for the most part prices still exceed incomes.

Those who partook in the loose lending couldn’t afford it either. In actuality the houses own them (the ones not forclosed on yet).

If you have to ask “how can they afford it”, they can’t. Which means that prices have to drop more. Simple.