Could it be that housing prices are so high because people don't feel like they need to put down 20% anymore. If I'm selling my house and I can sell it for 50k more if a bank is willing to lend that money to someone without them needing the extra down-payment money, then I'm going to do that. Obviously other factors go into the value of a home, but I think over time, the fact that you can get loans without serious down-payment has caused housing prices to rise.
This is undeniable. Also, the fact that in the old days local banks handled almost all mortgages. They were 100x more invested in whether the mortgage was repaid or not as it was their premium on the line. Nowadays these national institutions handout mortgages like they're balloons then bundle them and sell them to Wall Street.