Hypothetical couple:

Household income = $80,000.
After tax + student loan = $60,0000
In the hand after tax / expenses = $25,000

(Expenses include rent, power, phone, clothes, car, insurance, food, medical and I have been conservative with estimating costs)

Now they are saving for an average house at $500,000. They need 4 years of basically no discretionary spending to save a deposit. But wait! In the 4 years the YoY gain of 7% means that their house now costs ~$655,000. Now they need another 2 years to save a deposit of $131,000 (this is now assuming the house stops appreciating at 7% for those 2 extra years!).

Finally, after 6 years of constant saving every spare dollar they purchase their average $655,000 house with their deposit, borrowing $469,000 to the bank. Their loan of 6% means they will be paying $28,000 / year in interest leaving them a healthy -$3000. This is with no discretionary spending, so 6 years for which they can’t go to movies, can’t see a sports game, can’t buy an icecream etc.

TLDR:
In conclusion, if the couple had not purchased smart phones they would have been able to afford the house.