To say this is not a very helpful chart!, would be a huge understatement. We have to know more about the nominal level of household debt/asset ratio, and how it is distributed..
Exactly... Compare liabilities with assets... and costs to income... Not just liabilities with income, that doesn't really say anything useful.
As vulturistic as this sounds, I don’t see it as a problem at all. A housing crash is healthy, as it allows the market to reach equilibrium. Teaches the debtors, lenders, and government important lessons, and creates inefficiencies, and opportunities for fiscally responsible people.