Lender Processing Services is in the middle of its three-part video series titled "The State of the Housing Union," hosted by Jonathon Weiner, vice president of research and development at LPS. 

In the first video, Weiner recapped the events that led to the mortgage and finance housing bubble. The VP notes that the 13% annual appreciation in 2004 and 2005 coupled with rising mortgage rates in the same time period hurt affordability. 

Subprime lending profited from rising house prices and drove demand for housing, according to the VP. Bubble appreciation was concentrated in certain geographies, notes Weiner, and some states had more normal rates of appreciation. 

Over the two years ending in April 2009, however, rate intervention and homebuyers tax credit halted the decline temporarily, driving appreciation down 18%. 

This loss of equity resulted in a spike in delinquencies, peaking over 5 million. And while this number has continued to dissipate, it still hovers around 4 million.

"A house price bubble was created in the middle part of the last decade and it was caused, like all bubbles, by over confidence," said Weiner, who adds that the bubble was fed by feedback from an expansion of low-credit mortgage lending.

When the bubble popped, a massive amount of home equity was lost, he adds. 

In the second part of LPS' three-part video series, Weiner focuses directly on 2012, when housing turned around. 

In 2012, U.S. house prices increased 6.2%, representing a more-than-normal appreciation rate. But is this appreciation real? 

LPS uses its Home Price Index, which covers 85% of properties in the nation, to measure home prices.

Using the HPI, Weiner looks back at the monthly house price appreciation. It wasn’t until mid-2012 that appreciation rose to 2006 levels. Weiner noted that, while the 2012 rebound is universal, states with larger declines saw the steepest rebound.

So what pushed home prices up? "We conclude that there must be fundamentals that are driving that appreciation," says Weiner.

Housing was extremely affordable by historical standards, therefore, after several years of relative stability in the housing market, confidence finally returned, allowing affordability to kick in and start driving prices up.

Be sure to check back in for the final video on the state of the housing market.