This is certainly a trend that started a long time ago (pre-Clinton even?), and I think it's a positive one. I don't know exactly how much the tax cuts helped, but how much of this 'bubble' is really accounted for by bubbiliciousness and how much of it is really first time homeowners finally being able to afford mortgages? Access to credit, especially in the lower quintiles, is a big barrier to mobility.
I would think that "zero-down" guaranteed mortgages would have a lot more to do with it than actual interest rates (which should help refis, but not necessarily new home sales); continuing efforts at using FICO scores rather than zip codes also help quite a bit.
I know Doug is a big housing bear, but isn't it just as likely that this represents a real change in standard of living for the lower quintiles? At 68%, there's not very much room left to go up!
On the other hand, I had lunch with a pal of mine who weathered the dotcom bust just fine who has been renting for 12 years in one of the tonier parts of Sillycon Valley and realizes (only now?) that even though he's enjoyed decent/stable rents in a house that he (and now his growing family) like quite a bit, he may have priced himself out of housing (that he's become accustomed to, sure) by not building equity over that time ...
/jordan