In "The Big Short: Inside the Doomsday Machine," Michael Lewis discusses the rising housing prices and their implications on housing affordability. Analyst Zelman highlights that a balanced measure for assessing sanity in housing prices is the ratio of median home price to income, which historically averaged around 3:1 in the U.S. However, by late 2004, this ratio had escalated to 4:1 nationwide, raising concerns about housing market stability.

This troubling trend was not uniform across the country. For instance, in cities like Los Angeles, the ratio skyrocketed to 10:1, and in Miami, it was 8.5:1, indicating severe affordability issues in these markets. Zelman notes that similar escalations were observed in other countries, posing a significant question about the sustainability of these price increases and the future implications for potential homeowners.