Another part of the problem is Banks offering you loan amounts that you technically qualify for, but realistically leave you pinching pennies to pay your bills and groceries. First time home buyers don’t see that picture. They just get caught up in “more is better”. It’s not.
As a home inspector I’d always advise first time home buyers to buy in a price range that would allow them to save the equivalent of 1 month’s mortgage payment per quarter for home repairs. I’d also tell them that they may not use that in any given quarter, but would certainly use that amount in a year.
Now, as in 2007/2008, none of them listened.