I am no economist either, but the old saying is that if you torture the numbers long enough they will tell you what you want to hear.

So what then?

The historic norm home price is 5X average household income. Average household income was 71K in 2021. Lets assume that has now gone up 5% so maybe around 75K, making 5X = $375K. Median sales price is $455K which would be about 6X, so maybe 18% higher than the historical average. For reference, 2016 peak was 7X median income, so were no where close to that number.

Another way to look is the historical average mortgage should cost around 28% of gross pay. So with todays 75K median income that would be about 21,000 per year or $1750 per month of mortgage, which with 7% on a 30 year fixed would get you $265,000 of mortgage. So clearly by that measure the $455K median home price is over valued. If interest rates go to 9% as some were predicting, then there even more over valued.

Of course, inflation is a factor. The last large inflation we had was in the 70's and housing prices tripled because people wanted fixed assets not dollars. So even if you factored 6% core inflation compounded for 3 years then your $455K median home price should be pretty darn close to 5X your Median income. So if inflation holds and housing goes sideways for 3 years, were back to the norm.

Then of course there is the fact that the last time the fed started raising rates they broke the banks and we ended up in a lost decade. Japan had their lost decade 4 decades ago and haven't recovered. The fed continues to raise rates.

Pick your narrative - I can probably find numbers to match it.