Housing prices are "increasingly out of step with fundamentals," with evidence pointing to abnormalities experts at the Denver Fed haven't observed since the boom of the early 2000s.

"Reasons for concern are clear in certain economic indicators—the price-to-rent ratio, in particular, and the price-to-income ratio," five economists write in a new analysis of the market.

"While historically low interest rates are a factor, they do not fully explain housing market developments. Other drivers have played a role, including pandemic-related US fiscal stimulus programs and COVID-19-related supply-chain disruptions and associated policy responses," they note. "The resulting fundamental-driven higher house prices may have fueled a fear-of-missing-out wave of exuberance involving new investors and more aggressive speculation among existing investors."