Shortage of first-time buyers

Doomers argument that the tighter lending standards and high prices with flat salaries are unfair to young families, especially those with children, and that there will be a shortage of first-time buyers.

That is true.

However, this does not mean that there are no buyers. I expect that more properties will be bought by investors, at prices where the purchase makes sense to use them as rental properties.
The United States has a very high percentage of homeownership. I think I read a number of 60% early in 2008.
By comparison, in Germany, only 11% of the population own the place they rent. That does not mean that Germans are poor or live in slums. It has to do with a lot of things, among others the higher population density - much more people live in the cities, than in the US.

I expect that this 60% number will see a dramatic correction. There is and will continue to be a shortage of first-time buyers, but investors who did not buy on speculation will jump in and seize on the opportunities.