Might I ask where you live?

I live in the SF Bay Area. I earn over $80k, have zero debt, a healthy 401(k), a healthy-ish Roth IRA and a healthy savings account. I cannot afford to buy a house. Not even a s***ty one.

Granted, "cannot" is relative. I could raid my retirement savings and come up with $100k for a down payment, but even so, the mortgage calculators I've played with still say that if I want to put 20% down, the most I could afford would be a $350k property. That might buy me a studio condo or tenancy in common in a less than desirable neighborhood with a $2,500 mortgage payment, but in the process I'd be giving up the security I currently have. If I lost my job tomorrow I'd be able to go a year at my current burn rate before I had to start worrying. If I wiped out my savings and took on $2,500 mortgage payments I could kiss that security goodbye.

Some might say I should give up on the idea of a 20% down payment, but the idea of that much debt just seems ludicrous to me. The amount of stress that would put me under on a day to day basis would not be worth it. As much as I want a piece of dirt to call my own, to do with what I will, I'd rather sleep well at night.

I realize not every area has this expensive of a housing market; I am often blown away by the low prices in other areas. But are they really so low that a newly married couple, both still in grad school with student, auto AND consumer debt can really afford to take on a mortgage too? Perhaps the rent-vs-buy debate plays out so differently in cheaper areas that that actually makes sense.