BOSTON (TheStreet) -- U.S. home prices should continue to rebound from their 2007-11 collapse -- but only at about half the pace of last year's double-digit percentage gains, experts say.
"Prices should continue to go up because we're still in housing-shortage conditions," says Lawrence Yun, the National Association of Realtors' chief economist.
Home values enjoyed their biggest increases in years during 2013 as low mortgage rates, strong investor demand, a shortage of available properties and a sense that the housing bust has finally ended teamed up to push prices upward.
The NAR estimates that existing-construction homes fetched a median $197,300, up 11.6% from 2012 levels. That's the biggest annual gain since 2005.
Yun predicts prices will rise another 5.3% this year, thanks in part to continued short supplies of available properties.
He says the number of homes listed for sale during 2013 came in near a 13-year low due to a long-running construction bust and many homeowners who couldn't sell places for enough to cover their unpaid mortgage balances. Such "underwater" property owners can't easily sell their homes unless they're willing to kick in cash from their own pockets to make up the difference.
In addition to short supplies, Yun expects rising mortgage rates amid the demise of the Federal Reserve's quantitative-easing program to partly constrain further price gains by making home loans more expensive.
But at the same time, the economist predicts an improving job market will push housing prices somewhat higher as more consumers feel confident enough about their finances to buy homes. "Higher mortgage rates will act as a negative and job creation will act as a positive, so those two factors should basically cancel each other out," Yun says.