Zillow analyst Krishna Rao is out this morning with a worry-inducing report on American housing markets' erosion in "strong home price affordability." The big data show that in many markets, the percentage of folks who earn median household incomes who can afford a median-priced home is shrinking. In some markets, prices are already forcing people to look farther afield from job centers and downtowns. What do you make of this? Do price and relative affordability trends strike you as a threat to demand, or an opportunity to spark demand by disrupting the trend?

The narrative around price, thus far, is that builders have been "part of the problem," raising prices at such a fast pace that their own unit volumes, and perhaps demand itself has been placed into question.

Little attention has been given to the fact that many builders' mix--first- and second-time move-up and higher end homes--is what has skewed pricing conversations. When the buyer is "discretionary," has access to cash and no impediment of another property to sell in order to trigger a purchase--then both base price and price elasticity can be greater.

It's the lower end, the buyer who's more reliant on mortgage financing, the buyer who's barely going to make ends meet to achieve a homeownership dream, where the rigidity is. That part of the market hasn't moved for a number of reasons we should look at.

In new-home land, relative affordability (which inheres both payment power and access to credit) is a much more helpful term than affordability.