The home prices are higher in the US as of the moment, but it cannot be determined as a 'home bubble.' A home bubble is defined by Investopedia as "a run-up in housing prices fueled by demand, speculation and the belief that recent history is an infallible forecast of the future." A housing bubble begins when there is an increase in demand in the face of limited supply.
Sam Khater, CoreLogic's deputy chief economist said "Just because its overvalued doesn't mean that it's a home bubble or there is an impending crash."
Khater added, "Some markets are overvalued because of strong fundamentals." CNBC previously reported, "Home prices in 14 of the top 100 U.S. markets are now above the long-term fundamental value of that market."
In these markets, Texas is taking a different turn. Texas has experienced stability in jobs and the income growth has powered housing demand for the past ten years. CNBC noted, "Even with oil prices falling, housing demand is still robust and supply is near record lows."
Texas should not be worried of any home bubble occurring in their state because as CNBC pointed out, "The Texas economy is currently too strong to suggest any kind of price crash."
Looking back at history, it is undeniable that a catastrophic housing bubble was seen at the beginning of this century. Based on a past report by CNBC, "The home price frothiness today is not being fueled by free and easy mortgage credit, something far more fundamental is driving it." It is driven by a strong demand and weak supply.
Credit Suisse, a survey of real estate agents, conducted a survey that showed, "Agents continue to highlight the buyers' growing frustration with rising prices, but see current levels largely supported by tight inventory conditions."