Should Home Prices Rise Over Time?

Nationwide home prices are up 8% over the last year, according to the Case-Shiller housing index.

This isn't surprising. The supply of existing homes for sale is at a seven-year low. Construction of new homes is still well below the rate of household formation. Prices will almost always rise in that situation. It's simple supply and demand. And it's pulled millions of homeowners out from being underwater on their mortgage and brought new hope to the housing industry, boosting shares of D.R. Horton and NVR as the outlook for construction rises.

That's the good news. But what should homeowners expect the price of their house to do over time?

In this video, Fool analysts Morgan Housel and Matt Koppenheffer tackle that question.

The article Should Home Prices Rise Over Time? originally appeared on Fool.com.

Fool contributor Morgan Housel has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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