Housing prices, at least in Canada but I believe also in the United States aren't counted as part of the inflation statistics. Rent is though. So, since the Federal Reserve uses the official inflation statistics to determine interest rate policy (they try to keep inflation at either 1-2% or 1-3% per annum), the housing bubble would not have officially concerned them.
There are other measures to address housing bubbles that don't impact on the short term interest rate the Federal Reserve controls (or at least influences) that have been done in Canada but would have been the job of Congress to have done and not the Fed. They could have raised the amount of money a person buying a home has to put down, they could have reduced the legal limit on the length of time of the borrowing (I believe the 30 year mortgages were the primary driver of the bubble). Those are the two best measures.
This is a paper from the Canadian CD Howe Institute that looks into house prices and the inflation rate:
https://www.cdhowe.org/pdf/Commentary_362.pdf
