The world economic outlook is shaping up to be the worst in 80 years. Comparing this to anything anyone on this site has experienced is probably going to be misleading at best. Given this environment, making a large, highly leveraged, highly iliquid investment in a depreciating asset, is extremely risky.

10% unemployment is not going to be happening in a vacuum, it will be accompanied by falling RE prices and a host of other negative trends. All of the sudden that $100K that was earmarked as a RE down-payment starts to look more like back-up plan for paying bills.
Put this all together and people will not want to be buying houses.