The FACTS are that the American public is going to be shocked in the near future when reality hits and the number of homes waiting to be foreclosed upon actually start flooding the market. There is a "shadow inventory" of homes that have not even entered the foreclosure process that is astounding. It is significantly greater than you can even imagine. This rebound will not last and I predict that after the November elections (regardless of who wins) we will see a tremendous real estate crash unless ALL political parties get to work to address this issue. As the housing market goes - so goes the economy. And for the record, it doesn’t matter if interest rates sink to 0%. Banks are unwilling, for the most part, to free money to anyone unless you have absolutely perfect credit. There are few people that fit this criterion. Hence the reason that cash is king in this economy and most Sellers choose cash offers because they know they can actually finalize and close on a real estate transaction.
The housing bubble occurred in part because people were buying property they couldn't afford, but it didn't matter because they could always sell it, for more free money if they had to.
But people don't just buy homes for speculation. They buy them as places to live. Being able to afford a home that costs $1 million, or $750,000 means paying a mortgage that costs tens of thousands of dollars a month.
If you can afford it, great. But jobs have been disappearing from the US. Well paying jobs with some security are disappearing.
Rising housing prices, with a middle class that's being reduced, losing wages and moving backwards financially, doesn't go together. There aren't enough people making free money to support all the expensive housing out there.