If local incomes were high enough to afford higher monthly payments, the rents would be higher, no?
I think “price anchoring” has affected everyone — even the bears. Prices in 2005 were nowhere near normal. We need to look at numbers BEFORE the credit bubble (2001 and before) to really understand where prices should be.
Also, “inflation” numbers that focus on costs should not be considered WRT housing appreciation. As costs for other goods go up (especially food, energy, healthcare & other necessities), there is LESS money for housing. All that matters is **income** inflation, and that is not appreciating as fast a cost inflation…that is deflationary for housing.
