You make lots of money, but the Federal government was subsidizing the mortgage, real estate professional, and wall street industries by throwing money at people to buy houses. You are almost making as much as "the rich" who are supposed to be paying their fair share of taxes, yet a reasonable calculation shows that you can not afford these inflated prices. The answer is, you need to wait. The housing market crash has not really started yet, once people who bought in the last 1 to 5 years begin learning that their outstanding mortgage balances dwarf the market value (i.e. they have negative equity), and they see better houses than what they own going for less than they owe, the real bulk of defaults will hit the market. Then, housing will become cheap. It is better to rent for now, or buy a REO directly from a bank, or at a foreclosure auction. Don't jump in now, trying to catch a falling knife.