The mortgage rate before the 2008 crisis was floating around 6.5%. The mortgage rate in 2020 dropped all the way below 2.75%. https://fred.stlouisfed.org/graph/?g=NUh
A mortgage rate of 6.5% has a monthly payment of $1977 if a house is $300k with a 20% down payment. Most people make their financial decisions based on short term ability to pay. At 2.75% that same $1977 will pay a monthly mortgage on a 410,000 house (assuming a 20% down payment) https://www.nerdwallet.com/mortgages/mortgage-calculator/cal... . People are willing to pay more because they can afford more per month, and outbid people that will not match those prices.
There is also the fact that investors can get a higher rate of return by buying and managing a rental property rather than selling a mortgage, so that money is also competing to own the property. I personally feel we are in a bubble, that will pop less explosively than the 2008 bubble.
