NEW YORK (TheStreet) -- The housing recovery has been one of the bright spots in the economy this year, but it has also been frustrating for many.
Home prices have rebounded across markets, with year-over-year price gains in the double-digits for some of the hardest hit markets.
The rapid recovery helped free more than a million borrowers who were trapped with underwater mortgage loans.
But not everyone could participate in the housing rebound. Many buyers, particularly young first-time purchasers, were shut out of the market due to the lack of access to credit.
For other home buyers, there were simply not enough homes available for sale, and competition from cash-rich investors drove prices higher, squeezing them out of the market.
Online real estate company Zillow (Z) has released its predictions for 2014, and at least by some measures, the outlook appears bright.
Zillow expects home prices to continue to rise but at a more moderate, sustainable pace. Prices are expected to rise nationwide by 3%, after rising about 5% in 2013.
(Note that Zillow's index of home prices, which does not include foreclosure re-sales, has generally shown a more modest appreciation than other widely-followed gauges such as the S&P/Case-Shiller 20-City Composite Index.)
Higher mortgage loan rates, more expensive home prices and greater supply from new construction and fewer underwater homeowners should put a check on home prices. "For buyers, this is welcome news, especially for those in markets where bidding wars were becoming the norm and bubble-like conditions were starting to emerge," says Zillow chief economist Stan Humphries.