Experts predict smaller price increases this year. Their best guess is that prices will be up but not as much as last year.

Some surveys show consumers expect to pay 3 percent more each year for the next ten years. In other words, home prices will likely increase less than mortgage rates, indicating that the consumption motive to purchase a house is stronger than the investment one.

Also, the futures markets have home price increases at 5 percent annually. Experts see a continued buyer preference for rentals because household formation has been slowed by unemployment.