Why has the price of USA houses increased over the past 11years?

In 1996, construction workers were developing a new, housing, development, behind our house. In the development, the maximum price of a house was $150,000. I thought that was very expensive. A $150,000 was a decent place to live. The same houses are priced at $250,000 to $300,000 today.

greed, greedy sellers,greedy builders,greedy lenders, greedy real estate brokers, greedy flippers, greedy buyers who all had no clue but destroyed the market anyway

the buzz word of " real estate can only go up" put housing past what people were able to afford to pay for it based on incomes. Now the rooster is coming home to roost

In the same way that my I purchased my home in 1991 for 135,000.00 and is now worth over 600,000.00. It has a lot to do with suppy and demand. Real estate can be a very good investment in a good market. Over time, price go up on houses...just like everything else.

There is only 1 reason house prices go up. People want to buy them. If there is a limited supply then the price will go up.

The reason prices fo up over time on real estate is the same as everthing else; and it is NOT "greed" like the first poster said.
Talk to your grandparents and they can tell you about $.35 a gallon gas, cars selling new for less then 10K, etc. but also you need to know that at that time wages was $5 a day.
Over time INFLATION causes prices on ALL things to increase and here in the USA our federal and state goverment keep adding taxs to the things we buy and that also is a cost pasted on to the end user and bumps up prices. There is now over $.50 per gallon tax on the gas you put in your car.
Real estate is a GREAT investment over time because it USUALLY goes up in price with everything else so you can sell it later for more then you paid for it and make a profit where if you spend your money on cars, cloths, and other "consumer items" the value of those things go down over time.
So a simple rule is if you want to be rich; spend your money on things that go up in value and if you want to be poor, then spend your money on things that go down in value. Where did your last years wages go??
Real estate did have a HUGE gain in prices because the "herd mentality"; just like in the Dot Com Bubble of the stock market; were given a sales pitch by SALESMEN called lenders, morgage loan officiers and told that real estate can make you rich so they all bought into the real estate market without the proper training, education, or knowledge and made one of the biggest "sellers markets: in recent history. People were ONLY consired with COULD they buy an "investment property" and did not worry about cashflow, rates of return, leverage, risk, etc. And so prices went thru the roof, people got over-extended, and the house of cards is falling.
This will end JUST LIKE the stock market. The "herd" will lose a ton of money and the REAL investors will make another billion.

The laws of: What the Market Will Bear; and Supply and Demand.

You cannot sell a house for more than what someone is willing to pay. Buyers define what a home is worth by this simple strategy.

If Buyers are willing to pay X amount for a home, and there are no other homes out there to satsify the number of Buyers out there, then when an existing home comes up for sale, there will be many Buyers wanting it, therefore the price goes up to the highest that someone will pay for it.

As for Loslunas' answer of greed, what a crock. We were in a market of excess for a period there, but when someone is willing to pay what a Seller is selling for, there's no greed on the side of the Seller (or builder, or Realtor, etc.). It's the way the world goes round.