You can always buy the iPhone SE, if budget is an issue. There is no reason to buy the higher end iPhone unless you need it.Every vendor and supplier just keep pushing us and pushing us to see how far we will go before we decide to spend our money elsewhere, or not spend it at all.
Also, here in California, many people don't have to budget for a $1,000 phone. $1K is just "disposable income", Yes many can't afford it, so they offer the SE. And if you can't afford that, there is the used market.
Look at the economics of Cupertino, California where Apple is located. You cannot buy a house there for less than a million dollars. To qualify for a loan you need to earn three times the mortgage payment. Do the math....
Lots of people don't see $1K as even a speed bump.