John Varano

If you're thinking about buying a house any time soon, you've likely been wondering about home prices. There are a couple of good reasons for this. One is affordability. With mortgage rates low, prices are the natural place for buyers to focus their attention when trying to figure out if now is a good time for them to buy. The other reason buyers might be concerned about prices is worry that they may soon begin to fall. After all, nobody wants to buy right before prices crash and they can only rise so high before it's a bubble that will eventually burst, right? Well, not really. According to David M. Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices, the housing market is not repeating the familiar bubble-bust cycle. “Housing is not repeating the bubble period of 2000-2006; price increases vary across the country unlike the earlier period when rising prices were almost universal,” Blitzer says. And that's true. In many areas, home prices have not yet returned to their previous peak and buying a house remains an affordable choice. The other reasons Blitzer cites in arguing that current price increases aren't a sign of another housing bubble are the lack of homes currently for sale and the fact that new home construction is still lagging behind previous norms – both factors that will put upward pressure on home prices