Now, we know that after David the Israelites were taken into captivity, and they have never returned to that place. So now this utterance becomes a prophecy. He is talking about something that has not occurred yet. It is still yet "future" for you and me.
Remember that! God will make you [David] a "house." Insert "family." Insert "dynasty." It means what people call today, the house of David. He is saying that what is going to occur is that there will be descendants of David who will always be available to sit on the throne—representing God in heaven. You see the king being God's agent through which He would govern His people, Israel. That is, God's Kingdom on earth, Israel. So, God is going to establish David through a dynasty.