A good leading indicator for home prices is home inventories, which are still at record levels (though they've seem to have stabilized for now). The inventory report is a measure of how many homes are nominally on the market but aren't selling because the price is too high - the price has to adjust downwards until inventories reach normal, frictional levels.
The Bush attempts to buy stock directly in the two Fannies are almost equally embarrassing, being a bailout of shareholders that in no way affects the viability of the business, which is guaranteed by the government anyway. Let them all go broke.
30% of after-tax income doesn't sound unreasonable to me. Given that:
(a) in most areas there's more people than blocks of land in nice places, and
(b) living in a nice place makes a very significant difference to your quality of life
it makes sense that people are going to be willing to pay a significant fraction of their income in order to live in a nice place.
The only problem is the places where you can no longer buy a house on ~30% of the average local income. That's not sustainable.
A decent houses/condos in all interesting US metro areas are still in $400K+ range, which is absolutely insane, considering median family incomes.
Even most financial planning books/sites will tell you that it's "normal" to spend about 30% of your after-tax income on housing. WTF? Since when it's been "normal"?