I posted this in my own comment, but I agree that a lot of people won't buy homes until they drop even more. Unfortunately, I don't know how much more they're going to drop. There is a lot of artificially maintaining the value of homes, because politicians want to keep the voting block happy (people in debt with a family). I bought my home, because rates dropped below 5% and I had a chunk of money on hand, found a home I really liked, and was kind of sick at the thought that I'd just handed over almost $200k in just over ten years by renting apartments.

I make a solid income and owning a home isn't a trivial expense to me, so I can't imagine someone making a go at it if they have a family and an income that is half or a third. Prices should drop to whatever their natural un-aided point would be, so that all those people out there who will either never own a home or only do so by getting into unfathomable debt (all over again) will actually be able to own a piece. Imagine what the long term benefit to the economy would be if prices dropped just long enough for tens of millions of people to lock in rates on their own home? It would transform the economy as well as, perhaps, society. Owning a home would be the rule, instead of exception. Being in debt to own a home would be an exception. High rent would be an exception. There would be much more discretionary income to put back into other industries. Or, better, for people to stick into their savings so that they can retire with a home to live in and finances to support themselves.