[quote=poorgradstudent]Well, this does help explain part of the support for rising home prices.[/quote]
Sort of.
It better explains why low interest rates and innovative lending (not always a good thing– think NINJA loans) start to make sense.
Low payment and low cash down mean purchase can be almost as cheap as current rent prices.
Also, and I think more importantly, it explains that current prices are back-stopped to a certain extent.

If prices in condos drop even 10% they become cheaper than renting.

Barring a broad rent fade (and we are not currently at risk of a deflationary rent spiral) those currently high prices are effectively fixed.

There are some nuances and changes but that is the short version.