In certain parts of the country, home prices are rising as the country digests trickle down portions of the $Trillion's in money printing coming out of the Fed's QE program. However, a closer look at who is and who isn't buying houses shows that the majority of home buyers are hedge funds and flippers, and not the average American family or first time home buyer.
There was a time when the US housing market was not "driven" by hedge funds armed with government-subsidized, "REO-to-Rent" loans loading up on distressed properties, by banks refusing to release foreclosed properties into the market (thus creating a market subsidy) or by foreigners eager to park their "tax-evaded" wealth with the Anti Money-Laundering exempt National Association of Realtors. Instead, the main driver of US housing were first-time home buyers, "typically couples in their late 20s or early 30s" who historically have accounted for about 40% of home sales. Alas, last year, and all throughout the New Normal, this number has been about 25% lower, or representing just 30% of all sales - Zerohedge
It is these numbers that investors and all Americans need to be cautious about, and remember the winds of the 2007 housing bubble crash. When prices reached their peak in the housing cycle, and the stock markets were reaching all-time highs, the end to it all came not only suddenly, but in a crash that nearly brought down the entire Western financial system.
And this was before $20 trillion dollars was printed by the Fed in the last 5 years, and inflated into the economy.