Housing affordability: US vs. NZ

I came across an interesting opinion item from a US newspaper. "How low must housing prices go?" to make them affordable it asks. The answer:

Today, median home prices [in the US] are 3.5 times the size of median annual family incomes. This may be down from the recent peak of 4.2 times incomes reached last year, but it's way above the 2.8 times that home prices averaged during 1984-2000, when lots of homes were bought, sold and built.

And if you think 2.8 is low, check out the early 1970s. That was when home prices were only 2.3 times median family incomes, and housing was selling like gangbusters.
One major homebuilder recently proved that people will buy if the price is right. The firm slashed prices by 20-30% one recent weekend - and wound up selling more than nine times as many homes as it did on previous weekends.

To get prices back to 2.8 times family incomes would require a drop of 20% from today's levels - and this does not take into account interest rates and lending standards.

To equal the affordability of the early 1970s, prices would have to fall a whopping 38%.

According to the NZ Quality of Life Report, here in NZ the median home costs about 9.5 times the median household income.

UPDATE:

I made a couple of changes to the above post for clarity's sake.