Home prices need to collapse in order for the middle class to be able to afford them.
Home prices are heterogenous; they can be stable in one place and falling in another [1].
> are more expensive than ever, especially when you factor in interest rates
Home prices can fall while the cost of a home, i.e., mortgage payment for a new-home purchase, rises. The latter is closer to what PCE tracks [2].
[1] https://www.newyorkfed.org/research/home-price-index
[2] https://www.bea.gov/sites/default/files/methodologies/RIPfac...
Since then, underwriting was tightened up to stop the strippers taking out 4 mortgages situation, so unless we start seeing large scale layoffs causing people to miss payments and lose their homes, you will not see the defaults that cascade into more defaults and so on.
Not necessarily. New supply can come online. Or people can decide to wait to buy a home.
Job losses are required to lower home prices only if supply stays fixed and demand is inelastic, i.e. consumers have a compulsion to buy homes irrespective of price.
2008 had quick price reductions because people had to sell, and sell quickly, sufficiently increasing supply relative to demand.
Of course that puts me at odds with what is apparently the vast majority of humanity. Fuck you, got mine and all that.