[Mr. Jeeves]

The prices need to come down. When they are no more than three times the average annual income, as they used to be, then the 20% rule becomes less of an issue.

But a return to market prices will bankrupt a lot of politically inconvenient institutions and individuals, therefore this sort of stealth bailout will continue to dominate the headlines.

[RadiationRomeo]

I agree. But also, I do not think a first time home buyer should be expected to be able to afford a MEDIAN priced home.
I would expect most of us here in freeperland bought a cheap house for our first place, and worked up from there.
By quoting the 20% downpayment for the median priced home the congress critters are intentionally misrepresenting the effect on the first time buyers.

[dangerdoc]

The average house back then was about 1200 square feet. Those same houses are going for 2-3 times average income in my area.

The problem is that the people who can afford a 1200 square foot house are trying to buy 2500 square foot houses.