As the percentage goes lower the amount of debt will increase. The same thing happened in mortgages. The monthly payment stayed relative constant (plus inflation).
It doesn't matter. People care more about the monthly payment than they do the debt #. You can afford a much higher debt burden if the interest rate is smaller.
For fun, assume you can afford $1000/month in housing costs. With a 30yr mortgage and 20% interest rate. How expensive of a house can you afford? What if interst rates dropped to 10%? 5? 2.5?
Very strong correlation with home prices over the last 40 years.
