Average U.S. home prices - down by a third since 2006 and still falling - will rise almost 4% a year for the next five years, according to a new forecast.
Market watcher Fiserv sees prices stabilizing by summer's end and then climbing, quickly in some places until gains taper off. The forecast is based on an analysis of leading home price indexes.
Investors will drive much of the momentum, as they are now in cities such as Las Vegas and Phoenix.
First-time and trade-up buyers will eventually follow.
By the time home prices stop falling, they'll be almost 35% below their 2006 peak, Fiserv says.
Separately, market researcher CoreLogic said Tuesday that U.S. home prices rose 0.6% in March from February, the first month-over-month increase since July.
Good affordability and declining inventories are key factors.
Conventional mortgage payments now account for just 12% of median family incomes vs. a historical norm of 20%, says Fiserv economist David Stiff.
The Fiserv forecast, done with Moody's Analytics, assumes steady economic growth with no major shocks. Markets hardest hit by foreclosures will show the biggest five-year increases in home appreciation, it adds.
Six of the 10 markets where annualized prices are expected to rise most over the next five years had price drops of more than 50% from their peaks.
Las Vegas, for instance, is 61% off its 2006 peak.
Meanwhile, Realtor.com says Florida has more cities than any other state that show the strongest signs of a housing recovery.
Each quarter, the real estate website assesses housing data, including changes in list prices, inventories of homes for sale and local economies.
Phoenix, Miami and Orlando are the top turnaround cities in its study, based on those markets' improvements in the first quarter compared with a year earlier.
Asking prices are up more than 20% in Phoenix and Miami, says Realtor.com. Inventories are down more than 40%.
Naples, Fla., and Boise are also climbing in the rankings.
New to the list of top 25 markets are Oakland and San Jose, which are benefiting from growth in the tech industry.
The continued performance of local markets will depend a lot on the economy as well as on how quickly lenders dispose of distressed homes, says Realtor.com CEO Steve Berkowitz.
Realtor.com is owned by Move, which operates a network of real estate websites.
By Julie Schmit, USA TODAY