When the discussion about affordability comes up, people almost only talk about price. For several years in a row, supply has been lower than demand, leading to strong price appreciation. Median sales prices are at all time highs, prompting concern about the affordability of homes.
However, price is just part of the equation. When someone decides their budget, the price is not the starting point. The starting point is cost, or how much can I or do I want to pay each month? This means interest rates have a tremendous impact on purchasing power. This is in not to diminish the impact of higher prices, as that might require a higher down payment and carry more risk. However, affordability is important to look at beyond just price.
That is why even though house prices are at all time highs, they are just as affordable, if not more so than in 2008 when prices were at previous highs. When making a decision as important as buying a home, make sure to work with professionals and have a strong plan in place.