Home prices are on an upswing, with the S&P/Case-Shiller 20-city home price index rising 5 percent in the 12 months through March. But don't get over-excited, says John Coumarianos, a former analyst at Morningstar.

"It turns out that a nice single-family home is what everyone thought it was before the housing boom started in 2000 — a place to settle down, perhaps raise children and enjoy a pleasant day-to-day life," he writes in an article for MarketWatch.

It's "an asset that probably won't lag inflation over the longer haul, but also won't make you the next Warren Buffett."

The price of homes in big cities on the east and west coasts will probably rise a bit more than inflation in the long term, Coumarianos says. "Everywhere else, you should expect to simply keep pace with inflation."

In a sign of strength for the housing market, new home sales soared 6.8 percent in March from February, and the median price jumped 8.3 percent in April from a year earlier.

Meanwhile, the price trends for rent and homeownership make it more economical to buy a home rather than rent in many markets, but just try getting a mortgage loan.

"If you're going to live in a home for many years, it generally beats renting as a financial proposition (especially since rents have been skyrocketing), but don't expect the house to produce significant appreciation relative to inflation," Coumarianos explains.

"Even as housing prices have recovered, rents in many areas have been climbing even faster, tilting the math in these cities toward buying versus renting," writes Fortune's Chris Matthews.

"But as the housing finance industry continues to absorb the effects of the housing bust and the subsequent regulatory response, lenders are still gun shy about getting involved in residential real estate."

The problem: "the gap between what the average Americans can afford and the median sales price is much larger than it had been prior to the housing bubble," Matthews explains. "This is largely because lenders are being extremely picky about whom they lend to."

Only people with stellar credit — FICO scores above 720 — are receiving the majority of new loans. In 2000, before the real estate bubble began, the distribution was much more even.

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