Analysts are feeling more bullish about 2013 home price gains than they were just a few months ago, they're also becoming slightly more pessimistic about the long-term picture for the housing market.

A Zillow survey of more than 100 experts said they expect U.S. home prices to show a 5.4 percent increase for 2013, up from 4.6 percent just two months ago. For 2014, the expectation was for an annual price increase of 4.4 percent, up from 4.2 percent in the previous survey.

Looking further ahead, however, the panel foresees lesser gains from 2015-2017. On average, the group predicts annual home price gains of 3.5-3.7 percent over those three years, down slightly from 3.6-3.8 percent in the previous forecast. On average, survey participants expected a total gain in U.S. home values of 22.3 percent through 2017.

Rising rates could stall market

"The panel's expectations of near-term home value appreciation remaining above historic norms are consistent with a market struggling to satisfy strong demand from buyers attracted by rock-bottom interest rates and improving economic conditions," said Stan Humphries, Zillow chief economist. "But looking further out, that appreciation will have to moderate as interest rates rise, or else homes that seem affordable today - despite rapidly rising values - are going to look very expensive relative to people's incomes as it gets more costly to finance a home."

He said that how the Federal Reserve eventually pulls back from its policy of economic stimulus will be a major factor in whether current increases in home prices are sustainable or turn into a dangerous price bubble.

Survey participants, which included economists, real estate experts and investment and market strategists, were almost evenly divided on the potential for Fed policies to trigger a new housing bubble, with just under half seeing a moderate to high risk of a bubble and just over half seeing little or no risk.

Published on May 8, 2013