Nation’s top broker: Three reasons we’re not in a housing bubble

Single-family home prices in the 20 large US cities are still going up, just not as fast as they were the month before. Some of that had to do with Ben Bernanke and the Fed. But one of real estate's biggest names says there's no reason to believe we're in a housing bubble.

Yesterday, the S&P/ Case Shiller 20-City Composite Home Price Index rose 0.6% in July on a seasonally-adjusted basis, compared to 0.9% in June.

That doesn't mean the index is at its peak, however. Set at 100 in January 2000, the index topped out at 206.52 in July 2006 – double what it was 6.5 years before. The index is currently at 162.49, up 1.8% on a non-adjusted basis from June.

(Read more: Single family home prices rise, but at less feverish pace)

How would homeowners have done if they were treating their residence as an investment?

Measuring from June 2013, single-family homes in these 20 cities would have given a 1.9% annualized return over the past three years. But, they would have lost 1.26% on an annualized basis over the past five years. Over the past decade, the annualized return would have been 0.87%.

Meanwhile, the S&P 500 index gave investors a 5.1% annualized return from July 2003 to the end of June 2013. Pouring money in the stock market instead of a home would have gotten almost six times the return (assuming no mortgage, taxes, or maintenance costs). And that's even with the market collapse half a decade ago.

To be sure, some markets are hotter than others. The biggest hike was in Chicago, where single-family home prices were up 3.25% in July compared to June on a non-adjusted basis. The smallest increase was in Cleveland, up 0.48%. America's largest city, New York, had a 1.53% increase from June to July.

(CNBC tool: Map: Tracking the recovery)

But while the home prices are going up, why are they not rising as fast as they were before?

On a very big picture level, it has to do with the Federal Reserve Bank. For some time, the Fed has been buying US Treasury and mortgage bonds to add dollars into the financial system in hopes of stimulating the economy. Not only did that raise bond prices (and, so lowered interest yields), it also made borrowing cheaper to come by. Mortgage rates went from 6.41% in 2006 down to 3.65% in 2012. At the end of 2012, the Fed raised the amount of bonds they were buying to $85 billion per month.

Then, this past May, Fed Chairman Ben Bernanke hinted that the Fed would taper the bond-buying at some point in the fall. This led the bond market to sell off its bonds with the belief that the giant buyer Federal Reserve was no longer going to buy up as much bonds as they used to. Lower bond prices mean higher bond yields and, thus, higher interest rates.

Rates on a 30-year fixed mortgage went from 3.45% in April 2013 to 4.57% in mid-September. A quick jump in rates meant mortgages weren't as enticing as they once were. According to data from the National Association of Realtors, principal and interest payments as a percentage of the median family income went from 13.6% in April to 15.8% in July. And, sure enough, mortgage applications dropped in response; for example, it fell more than 6.5% in July compared to June as rates went up.

But last week, the Fed surprised many when it announced it wasn't going to taper its bond-buying, leaving a giant question mark on what's next in mortgage rates.

(Read: Forget easing prices, new homes are up, up, up)

Nonetheless, is there a reason to suspect a bubble that's about to burst in housing?

No, says Dolly Lenz, one of America's best known real estate executives. The CNBC contributor who will appear tonight on the new CNBC series "The Secret Lives of the Super Rich" says there are three reasons housing is not in a bubble.

As vice chairman of Prudential Douglas Elliman, Lenz is one of the top people in the largest, most competitive real estate market in North America. She has been a broker in more than $8 billion of transactions since the 1980s.

According to Lenz, the data make the case for why the rising real estate market isn't a bubble.

To hear the three reasons why Dolly Lenz believes we're not in a real estate bubble, watch the video above.

Be sure to catch the premiere "The Secret Lives of the Super Rich" tonight at 9pm Eastern and Pacific on CNBC.

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