These are just things I wrote in another thread. Felt they were pretty valid points. I'm interesting in hearing why I'm wrong.

1) People who buy homes for investment purposes will be buying at higher prices. Higher prices = more expensive mortgage = higher rent required to stay cash flow positive. If wages aren't keeping up, who's going to be renting these homes? Will investors be willing to take a hit by lowering rents?

2) People who buy homes for living in them at higher prices. $600k now = $4k/month. $500k = $3.5k/month. $400k = $3k/month. Who can afford these payments? Average wage is $75k/year. You'd need $150k/year household income just to afford $400k.

3) People don't have incentive to sell.

$500k home @ 2.9% interest rate with 10% down = $1849/month

Let's say this person has equity in their home and after selling it, comes out with $200k profit. They want to buy a $750,000 home and they put $200k down.

$750k home @ 6.75% interest rate with 27% down ($200k) = $3567/month

Why would anyone double their payment just to get a slightly better home, and given the rise in prices, that $750k home is probably what they could've bought with $500k before prices rose.