US home prices went parabolic in April and May, according to the National Association of Realtors, which reported Tuesday that the median selling price of an American home jumped 24% in the year through May.

The more comprehensive Case-Shiller Index of home prices sends out its reports a month later than the realtors’ index, but usually tracks it closely. Note that the Consumer Price Index gauge of “owner equivalent rent” lags far behind the reality of housing inflation.

“Hyperinflation” was the description offered by  Ivy Zelman, the CEO of a respected real estate research firm.

Building materials are in short supply—lumber from America’s southeast, shingles from Canada, crumbling supply chains for drywall and insulation, exacerbated by a truck driver shortage.

American households aren’t stupid. They see prices rising everywhere. And they know that the best long-term hedge against inflation is home ownership. The 30-year mortgage rate is now lower than the inflation rate for the second time in history (the first was in 1974, when houses were the only US asset class to turn in positive returns over the rest of the decade).

The housing bubble is a rational portfolio choice by households trying to hedge against inflation. This is a long-term hedge motivated by expectations of sustained, persistent and high inflation – just like the 1970s.

The Fed can channel Groucho (“Who are you going to believe – me or your own eyes?”) for some time, but not forever. The ’70s story ended in 1979 with a collapsing dollar and a bond market crash. The sequel probably won’t be much different.