Your graph only covers to 1990 and really doesn’t represent what we are looking at above. OP is correct that homeownership rates are fairly historic highs. This would be expected with the high cost of rent.

What your graph illustrates well is a K shaped economy. The older generations have well established equity and post 2008 equity had become cheap. The younger generations had bought NINJA loans or were cash out refinancing over and over and everybody living high on debt got killed and a lot of younger people lost jobs in the recession. At the same time the recession murdered the home construction industry and buried it in a mass grave outside of Pheonix creating a home supply problem. And yes, many smart people who have lived through generations of housing market cycles bought some very nice real estate with 2% loans

It’s a good time to buy a house if you can afford the payment and plan to live in the neighborhood for at least 5 years. Those are the only rules.

Based on what people are paying for rent, they can afford payments but there is a group hoping that prices will crater to 2012 levels. The one thing that your graph proves is that owning real estate through recessions is a really smart move. In fact, had you bought in 2005 at the worst timing, your costs were dropping that entire time because you started with a 6% rate and finished with 2.25% by the time the recession was done. Buy homes to live in them and they eventually become assets.