If there are less people, then pressure for good neighborhoods goes down, and we'll reach an equilibrium. I think it only seems like a ratchet because we're in the middle of a downturn after a 5000 year run of exponential growth.
Doesn't mean it doesn't suck to live in this time in terms of housing -- but in other terms, life is pretty outstanding. The two income thing is mostly new, but then compare the amount of time that medieval women spent on childcare and providing clothing. It's so much better now that they're not expected to spend every spare moment at the spinning wheel.