Home prices have gotten significantly higher and out of whack with what we need. That’s because they are a hedge against inflation caused by government money printing (or its equivalent). As each dollar becomes worth less, it takes more dollars to buy real things. Homes are real things that maintain their value in terms of deflated dollars – that is, the “price” goes up as it takes a lot more deflated dollars to buy a home.
Basically, high home prices have a lot to do with the Covid-era money pumping, somewhat to do with a slowdown in building then, and somewhat to do with sometimes absurb local regulations that make building homes expensive and time consuming.
Also, remember that home sizes have gotten much bigger over time.
