Fannie Mae economists say they believe home prices "hit bottom" earlier this year and that prices and sales will continue to move up.
Home sales dropped a bit over the last month but they remain strong compared to this time last year and price gains remain robust.
More home buyers may consider purchasing new homes, as the competition from distressed homes falls.
As inventories of for-sale homes drop, the amount of time homes are staying on the market is dropping too, according to the latest Realtor.com data.
September existing-home sales declined modestly, but inventory continued to tighten and the national median home price recorded its seventh back-to-back monthly increase from a year earlier, according to the National Association of Realtors®.
Mortgage rates held steady for the most part this week, remaining near all-time record lows set last week.
Find out which states saw foreclosure activity fall by 20 percent or more in the third quarter.
The real estate market is recovering but still faces hurdles, notably from tight mortgage credit, but problems with a sizeable share of real estate appraisals also are holding back home sales, according to NAR survey findings.
"If Americans carry on with that mindset, it will continue to cause problems as the economy undergoes a slow recovery," says a senior analyst at JZ Analytics about alarming results from a recent poll on strategic default.
The Appraisal Institute is teaming with an energy agency to asses energy efficiency and green features on the value of existing homes.