Yep. If I were to move to a comparably-priced house with an otherwise comparable mortgage at today's rates, my costs would go up $1650/month. That's 20 grand a year. So before a company could even begin to entice me with a raise, they need to increase my salary by about $30k (accounting for taxes) for me to feel like I'm breaking even.
Practically, for your average well-to-do white collar worker, the additional $20k in interest payments might equate to 10% of gross income. The pain of the additional expense is certainly non-zero, but it isn't necessarily prohibitive. Especially if that $20k is going into savings or investments anyways, it's not coming at the cost of foregoing some other current consumption. Many people could afford it, but have some hesitation.
The declining transaction volume is more likely due to forward-looking expectations on prices. People can afford it, they're simply opting out of eating the additional costs.
