The last national home price bubble occurred in the mid-2000s when home price growth exceeded wage growth (see yellow box in the chart below).
When the housing bubble burst, it almost took down the entire financial system. But starting in 2012, here we are again. Until the latest data where wage growth is almost identical (blue box).
On a localized level, let me show the relationship between home prices and HUD Median Family Income for cities that I have lived in.
Phoenix AZ had a massive home price bubble. But after the burst, home prices have been rising in line with growth in HUD Median Family Income.
How about Columbus Oh? Columbus had a mini-bubble back in the mid-2000s, but home price growth has been in alignment with median family income growth.
How about Washington DC? There was a rather big home price bubble, but home price growth has been in alignment with median family income growth since 2009.
How about Chicago IL There was a large bubble in 2006, but home price growth has been slow to increase after the bubble burst.
Here we are again! At the national level, but not at several metro areas.