Nationally, home prices were up a little over 5% last year, and Fannie Mae Chief Economist Douglas Duncan expects about a 4.5% average increase this year.
Overall, in spite of the challenges, there seems to be a sense of optimism in the market.
"I think the optimism is reasonable," Duncan says. "For people who are credit qualified -- and that's the critical issue -- if they have good credit, and they're interested, in most markets they'll be able to find something that will suit their needs."
Duncan says that while the real estate industry lost a little ground in home sales last year as sales softened due to a spike in mortgage rates, this year should see a bit of improvement.
"We think 2015 will be up 5 to 6% -- that means it will be higher than 2014 and 2013, but we think that those folks who are looking for a real breakout year are probably going to be disappointed," he adds.
The spring housing market
Susan Wachter, professor of real estate and finance at Wharton, has a similar outlook and expects single-digit price appreciation. The allows sellers to get sizable returns but lets buyers wade into the market at reasonable prices.
"Despite the fact that housing prices have increased, in many markets they're still below where they were at the peak in 2006," agrees Susan Wachter, professor of real estate and finance at Wharton, expecting single-digit price appreciation. "I do see prices continuing to increase at a moderate pace, certainly not the pace of a year or so ago. And I do see construction activity across the board, not simple multi-family but also single family -- I see it coming back, but slowly."
That said, the housing recovery will be slow-going; Wachter expects housing growth to lag the overall economy.
"It doesn't yet have the big engine of growth behind it, which is the three million or so households who are missing," she said.