In very general terms (with plenty of exceptions and variations), the housing market can be divided into three groups. There are those who are trying to get in — generally, young people searching for their first home. There are those in the middle, who want to trade up from a smaller house to a bigger one. And there are longtime homeowners, “empty nesters,” who are approaching or already enjoying retirement and want to downsize or get out of the market completely…

How is each of these groups affected by ever-rising house prices (or the illusion of ever-rising house prices, which itself keeps them rising longer than otherwise)? The first group surely doesn’t benefit. During the big housing bubble, stories about young couples watching helplessly as the American dream of homeownership passed out of their reach were a newspaper staple. They had a similar tone to the stories today about young couples who overreached to buy a house and now can’t make the payments. As prices come down, more people can afford to buy a house. That’s a good thing, isn’t it?

Then there are the people who want to trade one house for another. Maybe they’ve been transferred by an employer. Mostly, they are hoping to trade up — to a larger house for an expanding family or to a nicer neighborhood. These people are in the same situation as the first-time buyers.