For prices to drop substantially from here all we’d need is any one of a number of things to go differently. Not even wrong, just different.

For instance one of the major banks could be forced to divest itself of its foreclosures to raise capital. Flooding the market with inventory seldom raises prices.

Another for instance is the economy worsening at a rapid pace, something I feel is pretty likely. Less buyers, same number of houses, falling prices.

On the interest rate front, I’m guessing as the presidential race heats up Foney and Fraudie are going to come back up. Putting them in run down mode would almost certainly lower prices.

A blow-up of the Euro while nominally good for the dollar would actually probably be good for prices. So see there is something to look forward to.

Back to the intent of the OP, payments! The only reason why prices haven’t fallen more and payments risen is because the govt is subsidizing risk. Almost every person who buys now is gambling that they will be able and willing to keep doing so. Hell I’d buy if I could find something I’d want to live in for ten years that I could afford. However still being in the top 20% of the income bracket and debt free doesn’t seem to get me there. That more than anything else tells me we haven’t seen bottom.

Enjoy your low monthly payment sir, it comes at an evil cost. When the govt is incentivizing you to do something, its usually not a good idea.
Josh