Realtors, homeowners and others who ask, "Are we in another house price bubble?" The answer is "No," said Len Kiefer, deputy chief economist for Freddie Mac, who was speaking at the 2019 Florida Real Estate Trends summit during the Florida Realtors Mid-Winter Business Meetings.

"Home prices are up, but that by itself is no indication of a bubble; you need an element of speculation or credit financing involved as well," said Kiefer. "We looked at credit, capacity and collateral. In the mortgage space, credit has not expanded in anything like we saw a decade ago. As a result, the default potential rate is pretty low. And we clearly don't see the types of financing products that pushed the dynamics then."

While incomes are up, they're not matching the pace of rising home prices. Still, mortgage debt payments as a percentage of disposable income has declined significantly, largely due to lower mortgage interest rates.

"In the downturn, people were taking on a lot of debt, which in turn pushed up prices," said Kiefer. "Now, looking at total mortgage debt compared to equity, we're not seeing that kind of speculation or problem. So, when I'm asked about a bubble, I do say, No. But the way I pause before I say no has been extending a bit as home prices continue to rise more than incomes. However, in our view, house prices will moderate as mortgage rates rise."

So, what's ahead for the U.S. economy and housing market in 2019?

"Employment and a little bit of income growth will be key to supporting homebuyer demand," said Kiefer. "Inflation is going to drive the Federal Reserve policy. It's been pretty tame the past few months. We at Freddie Mac expect one to two rate hikes in 2019 as opposed to the four hikes in 2018, though that will be data-dependent."

The economy should experience modest growth, he said, while mortgage interest rates should gradually rise throughout the rest of the year and be somewhere around 5 percent by the end of the year, representing about a 0.5 percentage point rise from the current rate.

"When interest rates rise, the housing market responds pretty negatively and home sales go down," said Kiefer. "But looking ahead to spring, we should see stabilization of home sales and modest growth in the U.S. economy. Our forecast nationally is for housing prices to moderate substantially over the next few years. However, one of the biggest challenges for the overall economy is a lack of new housing supply."