Home prices could rise 35% without stretching affordability, said Raj Dosaj, vice president of the behavioral library and home price index at LPS Applied Analytics.

Dosaj made that bold assertion while speaking at "Outlook: Is the Housing Recovery for Real?", a webinar hosted and moderated by HousingWire's executive editor, Jacob Gaffney.

Dosaj was joined by Christopher Whalen, executive president and managing director for Carrington Investment Co. Whalen was quick to say the housing recovery is real.

"I think given the magnitude of the drop that we saw, you almost had to have a rebound and that’s indeed what is happening," Whalen said.

Dosaj followed up on his bold statement by saying this increase could be less if rates increase as they are expected to do.

During the HousingWire webinar, Dosaj displayed a graph revealing the average mortgage payment to median-income ratio.

The annual graph, which goes back to 1995, has never been lower than January 2013, which dipped to just below 18%.

"During the peak of the housing run-up, affordability was stretched as the market sold of," noted Dosaj. "As home prices dropped, affordability dropped."

According to the most recent Standard & Poor’s/Case-Shillerhome price report, home prices rose 7.3% in 2012.

The latest Federal Housing Finance Agency report revealed a 5.5% growth from the fourth quarter of 2011 to the same quarter in 2012.

Both reports indicate a strong start to 2013. So could Dosaj be right?

"There are definite signs that there's room for growth," concluded Dosaj. "Things are generally looking good for the housing market."