Rising home prices in the U.S. are nothing new. However, when the pandemic stalled the global housing market, home prices spiraled out of control. Housing prices have now risen to the highest levels ever seen in the U.S., exceeding even the peak of the housing bubble in 2006.

The problem is that demand hasn't been able to keep up. Rather than rising due to an influx of buyers, housing prices have been inflated by supply shortages and unusually high construction costs. These factors have also impacted buyer confidence: according to the National Association of Home Builders (NAHB), home buyer confidence fell to a 13-month low this August.

"Buyer traffic has fallen to its lowest reading since July 2020 as some prospective buyers are experiencing sticker shock due to higher construction costs," NAHB Chairman Chuck Fowke told CNN.

Recent earnings reports from Home Depot (HD  ) also shed some light on the current state of the pandemic-recovery housing boom. After increasing by nearly 30% in the first three months of this year, Home Depot's same-store sales increased by just 3.4% during the second quarter. In-store traffic also fell by 6% year-over-year.

The Federal Reserve has also received some of the blame for the red-hot housing market driving prices sky-high. The Fed is still carrying out a monthly purchase of $40 billion in mortgage-backed securities, despite repeated calls for them to cut back. Fed officials have stated that they should start considering reducing mortgage bond purchases in order to relieve the pressure on the housing market, but they say the Fed will only cut back on these purchases once "substantial further progress has been made toward its maximum employment and price stability goals."

Another driving force behind rising home and construction costs was the ballooning price of lumber. While lumber prices are finally beginning to fall, they have a long way to go to counteract the roughly 400% rise seen over the course of the pandemic due to supply chain disruptions and mill shutdowns.

According to the NAHB, those supply chain problems could be alleviated in the months to come, meaning "the market should return to more normal conditions." The NAHB may be confident, but others aren't so sure.

The Delta variant is a major concern in the U.S., with many giant companies like Apple (AAPL  ), Google (GOOGL  ), and Amazon (AMZN  ) already hoarding cash.

With prices surpassing their pre-crash peak, many are afraid that the housing market may be heading for another bust.

However, there are some key differences between the situation in 2008 and the situation now: for one thing, before the 2000s crash, there was a glut of houses for sale after a surge in new construction. In comparison, the housing inventory is currently at some of the lowest levels ever seen in the country. Next, many of the pressures currently driving up housing prices aren't expected to last forever.

That being said, while these differences aren't insignificant, they also aren't a guarantee that the housing market will see a healthy recovery in the months or year to come.