Damn, I completely misunderstood what you were saying, sorry!
For some reason I was reading the comment that the average homebuyer is paying 8x their salary for a house. What you've been comparing are median incomes to sales prices. A useful indicator, but not capturing what people are actually paying - it is entirely possible the 'medians' are priced out, especially with such constrained supply.
That makes me feel way less crazy now... apologies again.
Even though as you said it's "not capturing what people are actually paying" it's related, and still horrifying to me, as a measure of overall housing affordability. Esp when you look at places like vancouver, sydney, melbourne.... At 10x I cant understand how the market keeps going - how do home ownership rates stay so high? how are people affording these multiples? It just doesnt make sense to me how it can keep going. To your point this measure includes the people who cant afford to buy at all , but theres still enough ownership % overall that it doesnt add up to me.
Median-income-to-house price by state : https://constructioncoverage.com/research/cities-with-highes...
As you can see California is at a whopping 8.9x
US overall: https://www.longtermtrends.net/home-price-median-annual-inco...
Pushing 7x.