Rising home prices may have slowed, but affordability with a dwindling supply of homes is expected to remain a stumbling block for many prospective home buyers in 2016, U.S. housing experts say.

Real estate economists expect the U.S. housing market to continue downshifting from a phase fueled by investors and cash buyers to a more stable market with modest home value growth and slightly higher mortgage rates. Here are the top predictions for 2016.

1) Prime mortgage rates will go up.

The Federal Reserve Bank closed 2015 by hiking the Fed interest rate a quarter of a point on December 16 – the first rate increase by the Fed since June 2006

U.S. real estate economists say the impact of a quarter point hike will only slightly impact traditional mortgages.

“An eventual increase of the prime rate won’t affect the 30-year mortgage rate by much,” said Nela Richardson, chief economist for Redfin, an online real estate brokerage firm.

For a home buyer, purchasing a single family home for $400,000, an increase of quarter point with a 30-year mortgage would be around an extra $50 a month in mortgage payments. Most buyers in the position to able to put down a payment and secure a loan to buy a home will not deterred by the small increase, Richardson says.

“Even if rates go above 5%, people will still buy," he said. "A 5% rate isn’t a turn off.” 

2) Prices will continue to rise, but with sluggish growth in sales.

Housing price gains slowed toward the end of 2015. But rising mortgage rates coupled with growing home prices, which are outpacing wages, are expected to hold back home sales.

“This year the housing market may only squeak out 1% to 3% growth in sales because of slower economic expansion and rising mortgage rates,” said Lawrence Yun, chief economist at the National Association of Realtors, in a January 12 statement. “The continued rise in home prices will occur due to the fact that we will again encounter housing shortages in many markets because of the cumulative effect of homebuilders under producing for multiple years.”

Yun predicts that home prices in the U.S. will grow between 5% and 6% this year.

3) Affordability will be worse in major U.S. cities.

Even though price growth for homes will slow down, inventory of homes will remain tight in most markets – especially in larger cities.

Affordability, measured by the gap between prices and incomes, hinges on inventory. Housing supply is expected to remain a big issue for buyers up, economists say.

“There are a handful of metropolitan areas that are already more expensive now in terms of the mortgage payment relative to income than they were in pre-bubble years,” said Skylar Olsen, senior economist at Zillow, a Seattle-based real estate and rental marketplace site.

The home markets in the Bay Area, Seattle, Los Angeles, and D.C. are expected to grow in prices and become even less affordable, the Redfin economists predicts.

Cities along coastal California such as San Diego, San Francisco and San Jose are just a couple markets more expensive now than before the peak of the housing bubble in the mid-2000s. The small uptick in prime interest mortgage rates will pack a bigger punch in these areas where affordability remains an issue.

4) More singletons will buy homes.

Marriage is no longer a precursor for buying a home. The homeownership rate of single people has increased steadily over the last couple decades – especially for singles who are employed full-time.

“People are not waiting for marriage before mortgage,” Richardson said.

The Redfin economist expects more single, high-earning professional woman as homeowners in urban areas for 2016. Growth in incomes with woman who earn over $100,000 is outpacing men in most urban areas, according to data collected from U.S. Census Bureau in 2014.

“We’re going to see a lot more single lady buyers,” the Redfin economist predicts.

5) Millennials will continue to put off home ownership.

The trends impacting the Millennial generation, aged between 23 and 34 years old, are felt widely across the country -- namely, that it’s more difficult in an expensive area to save for a down payment on a home.

Millennials started off in a bad job market from the Great Recession, and it’s hard to save for a down payment for a first-time home, real estate economists say.

“Don’t expect them to come out in full force this year,” Richardson said. “In 2016, were going to see more Gen X first-time buyers.”