“Affordability” ignores existing equity and only applies to first time buyers.

As an example, let’s say someone bought a house in 2000 for $300K. They put a bit of money down, had a regular mortgage (how old fashioned), and now they owe $250K. They sold in 2005 for $600K and bought another house for $800K. Their new loan amount is 550K, assuming they didn’t get stupid and take it all out in HELOCs (BIG assumption!!!!).

Sure, first time buyers were stretching too, but they are not the “median buyer” and so the “media house value” shouldn’t apply to them. That’s my opinion anyway…

Ultimately, affordability for first time buyers will catch up to the market. How long that takes, I have no idea! Could take 2 years, could take 20 years! Maybe all the baby boomers will have no buyers to sell their houses to when they all retire and expect to cash in their House-01K?