A team of researchers at the Federal Reserve Bank of Dallas issued a stark warning last week that American home prices “are again becoming unhinged from fundamentals.”

The team published research on March 29 analyzing the bank’s in-house index of home prices nation-wide, the ratio of home prices to rents and the ratio of home prices to disposable income. Their conclusion was that signs of another housing bubble are in the air.

At the heart of their analysis is a contention that buyers have become too “exuberant,” paying higher prices than they otherwise should be based on market conditions, as they did in the years leading up to the financial crisis of 2007-2008 and the Great Recession.

“Since the beginning of 2020, the price-to-rent ratio has soared beyond what observed fundamentals alone can explain,” Jarod Coulter, Enrique Martínez-García, Valerie Grossman, Peter C.B. Phillips and Shuping Shi wrote.

The authors speculate that home price increases driven by low-interest rates and other market fundamentals might be fueling the “fear of missing out” among buyers, particularly among investor-buyers.

Still, the Dallas Fed researchers don’t believe the current market dynamics show potential for another 2007-style crash.

“Among other things, household balance sheets appear in better shape, and excessive borrowing doesn’t appear to be fueling the housing market boom,” the authors write.

So far, while applications for purchase loans are down nation-wide from last year, demand for these mortgages has stayed quite steady week over week, even as Freddie Mach reported the average interest rate on a 30-year, fixed-rate loan shot up from 3.89 percent during the week ending Feb. 25 to 4.42 percent for the week ending March 24. The Mortgage Bankers Association reported on March 24 that the national median payment applied for by applicants jumped 8.3 percent to $1,653 in February, up from $1,526 in January.