Also, if they can afford a new house, another couple hundred bucks shouldn't kill them....Providing they didn't stretch themselves too thin when purchasing the house in the first place.
Also depends on the development. Around LI, they are building 55 and older complexes like they are going out of style. Typically these folks sell their homes and buy the townhomes or condos in these developments for a much lower rate. When this happens, they have nice surplus for retirement, discretionary income, etc...
I think you will find that with lower cost housing, people are more apt to stretch themselves in order to own a home vs more upscale homes where people may have more of a cushion. Then again, in todays day and age, just about everyone has to stretch themselves really thin to afford a house!