How are people supposed to afford 4% down payments on houses with severe rent increases?

The economy is a mess.<br><br>It seems that there are rent increases happening all across the US, partly due to the fact that there simply aren't enough places to live. According to Redfin, the average home price in the US is now over $340,000. With a mortgage rate of around 7% in the US, that means that homeownership is further than ever out of reach. In my mind, houses are no longer an investment, they have simply become a luxury. For example, if you were to buy a house price at $340,000 with 20% down, monthly payments on a 30 year mortgage will be right at 1,800. Add on property taxes, insurance, and HOA fees and that number goes up by a couple hundred. Is anyone able to explain to me how this makes sense? Is anyone really able to afford to purchase a house right now?