On a national scale, this suggests that weak employment growth of the kind shown in May’s jobs report, with only a 38,000 increase in nonfarm payrolls, could eventually hurt home prices across the country. That’s possible. But even without a national price slowdown or decline, there is reason to believe that double-digit increases won’t continue for long in individual cities. Short-term variations abound, but for the most part, the differences in long-term home price increases in individual cities are about plus or minus one percentage point annually. (Exceptions include San Francisco and Portland, whose home prices have grown almost two percentage points above average annually since 1987.)

Cities with big home price increases recently have issued more building permits per capita. This supply response has the potential to reverse at least some of the prices: When housing supply increases, it tends to bring high real estate prices down, though that takes time.

There is another wrinkle, however. Demand lately has tilted toward homes in central cities, where land is scarce, rather than in more spacious distant suburbs. This creates imbalances. New homes in the suburbs have often remained unsold for long intervals. Construction of apartment buildings has increased in cities since the financial crisis, but new arrivals with good jobs often haven’t wanted to live in apartments. This may explain 2016 data showing that permits for new buildings with five or more units have flagged. Despite these problems, the supply response to higher home prices should moderate or reverse some of the biggest increases.

Yet many people assume that home prices will rise ever upward. These expectations are more modest than in the years leading up to the 2008 financial crisis, but they are substantial. The January 2016 Pulsenomics U.S. Housing Confidence Survey showed that expectations for home price increases over the next 10 years averaged 3.7 percent a year nationally, which implies a 44 percent total increase by 2026. Expectations were a little higher for homeowners than renters and higher yet for recent buyers — which appears to reflect a wishful-thinking bias. They were highest for recent buyers in high-price-increase cities, peaking at almost 6.5 percent a year.

Historically, however, investing in homes just hasn’t rewarded most homeowners that much. As I have calculated, home prices corrected for Consumer Price Index inflation nationally were nearly flat for the century ending in 1990. And when nominal home prices are deflated by per capita disposable personal income, it turns out that real prices of existing homes fell 12 percent while real prices of newly built homes fell 30 percent from 1975 to 2015.