Dive Brief:

• There were mixed signals coming out of 2013 — builder confidence and housing starts were up while mortgage applications and existing home sales fell.
• It is likely mortgage interest rates will rise through 2014 to about 5.5%, low historically but unlikely to keep the refinance business booming for lenders, and tighter lending standards in federal law take effect — estimated to eliminate 10% to 20% of the people who qualified for loans last year.
• Household formation is likely to stay low because of the difficulty in finding jobs that can make a mortgage affordable, so there will still be demand for homes to use as rental units, and sales will hold around 2013's approximately 5 million units.

Dive Insight:

The predictions come from Rick Sharga, an executive vice president at Auction.com.  The key to the housing sector taking off solidly, with all-positive indicators, is the economy's beginning to generate jobs that let people move out of apartments and into starter houses, most often new ones. As the post-recession economy grows the income gap and shrinks the middle class, that may be hard to do.