And next year, the housing market will see some fresh complications that could slow growth when it should be springing back, according to one leading economist.
The National Association of Realtors' 2014 forecast, introduced during the association's 2013 Realtors Conference & Expo, says home sales should "retain the healthy gains" seen so far this year.
Home sales last year and this year have pretty matched mirrored home values, with sales up 20% and home values up 18%.
Lawrence Yun, the NAR's chief economist and historically a "glass-half-full" analyst on housing, isn't sure that growth can continue, though.
He notes that while home sales and home values both show double-digit growth, income levels for people who might buy those increasingly expensive houses have checked in at a much lower rate -- between 2% and 4% in the past two years.
"We've come off of record-high housing affordability conditions in the past year and are now at a five-year low, but conditions are still the fifth-best in the past 40 years," he says. "While the median-income family in many areas will still be well positioned to buy a home in 2014, income is barely budging given growth in consumer prices."
Yun points also to tighter inventories (meaning a less-than adequate number of homes for sale) and "stringent" mortgage lending standards as big reasons the housing market should see slower growth (but not a decline) next year.
Higher interest rates could already be threatening home sales leading into 2014, as they could dilute interest among homebuyers. Yun is also wary of higher fees and tougher regulation.
Here is what Yun sees in the near future:
- Home sales will nearly match 2013 levels, at 5.1 million existing homes sold. That means zero growth, basically, compared with the 10% growth seen this year.
- Home prices will rise by 6%, compared with a 12% rise last year.
- Mortgage rates, now at 4.16%, will climb to 5.4% within the next dozen month.
- New home sales will rise from 429,000 this year to 508,000.
- The inflation rate will rise 2.7%, and could reach up to 6% in 2015.
That's a pretty conservative outlook coming from an economist who usually casts a brighter glow on the U.S. real estate market.
But at least the housing sector isn't falling into decline, and if the economy continues to improve, Americans may well shrug off higher rates and tighter inventories and dive into the market next year anyway.
After all, families still have babies, employees still get promoted and transferred and older Americans still want to buy those homes near palm trees and golf courses.
In a tough year, that may be enough to keep the U.S. real estate market in "plus" territory -- but not by much, if Yun has his numbers right.