As Catherine Rampell says, this is a little bit misleading because down payments and maintenance costs have probably increased on par with rent, or perhaps even a bit more. Perhaps the mix of homes has changed a little, making medians less comparable.
But still. If you're investing for the long term, it's hard to see how buying a home wouldn't have a good return.
The fact that no one is buying suggests to me that we live in a fear-driven economy that is seriously detached from economic fundamentals. This is a bizarre, severely credit-constrained equilibrium or no equilibrium at all.
Update: Martin Feldstein has an interesting idea to keep home prices from falling further.
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