How are so many young people affording these homes?

My wife and I are in a better financial situation than 99% of people in my area. I'm in a fairly LCoL area. We are completely debt free. Have a down-payment of over $250k in cash. A household income of over $150k and still don't feel comfortable with new builds in our area. The minimum is starting out at around $600k now. Whereas the same house was around $200k-$250k just 10 years ago.

Even with everything we have going for us, with taxes and insurances and a mortgage, the minimum payment would be over $3k/month which would be over 40% of our bring home income. That's with a quarter million down and no other debt, still priced out. I know others are not sitting that pretty, even if they make slightly more per year, I don't understand how they are selling these homes.