Builders keep building homes, home prices keep going up. In order for people to buy the newly built homes, you need to keep adding people capable of affording the inflated housing prices to the market. As you stated, millennial's (and many others) cannot afford it due to stagnant wages and student loan debt. They also cant afford the insane rents in many cities so ~23% of them live at home with their parents.

Eventually there are a ton of empty houses on the market without buyers, sellers are forced to lower their prices. People in upside down mortgages cannot sell as housing prices are lowered and foreclose, further dragging down the price. Market crashes. People with capital swoop in and buy up houses to rent out, driving up rent further as they can set the price.

This collapse will be slightly quicker than the last as the market is not as propped up with sub prime style loans. If salaries don't keep up with inflation a crash is inevitable. Deck is stacked against people without a strong financial base (upper middle class parents) but hey, they can stay on their parents health insurance for longer now, so that's nice.