I will not argue about someone's ability to buy a new house in the current environment. But in this thread discussion is focused on existing homeowners moving to a new house.

In your case (assuming $300K original house price) you will sell it for $600K, net $264K profits after commissions. Use profits plus $60K of original downpayment and any additional equity in the old house as a downpayment for a similar house at $600K. The new mortgage will be similar to one you had in 2007. Same rate and most likely smaller principal. Not a big difference.