The year as a whole ends with the biggest year-over-year gains in home prices in seven years -- and the national median existing-home price for all of 2013 close to $197,300, up an estimated 12% from 2012. While obstacles remain, momentum seems headed in the right direction.

The latest S&P Case-Shiller home-price report surveying 20 major metropolitan areas marked an October rise of 13.6%, the swiftest rate since February 2006, coming on the heels of a mixed 12 months in the housing market.

“It’s been a good recovery year, even with the softening in the second half of 2013,” said Lawrence Yun, chief economist at the National Association of Realtors. “There were 5.1 million homes sold in 2013, and I expect around the same number for 2014.”

Higher home values increase wealth, help get homeowners out from underwater and make Americans feel more confident and willing to spend, said Trulia chief economist Jed Kolko.

“Overall, it’s helped people gain equity and that’s a good thing for the economy,” explained Kolko.

David Blitzer, chairman of the index committee at S&P Dow Jones Indices, said that there shouldn’t be fears of prices rising too fast, despite the fact that price gains are in the double-digits this year.

“Monthly numbers show we are living on borrowed time and the [price] boom is fading,” he said in a press release Tuesday. “[Some] housing data paint a mixed picture suggesting that we may be close to peak gains in prices…. Most forecasts for home prices point to single-digit growth in 2014.”

A slowdown in housing prices, which have been rising since early 2012, would be welcome news for those looking to buy. This year’s increases in prices and higher mortgage rates have made affordability conditions less attractive, especially for those between the ages of 25-34.

“Many first-time home buyers were not participating this year and a big reason why is because they can’t obtain mortgages,” said Kolko. “But there are also less households being formed right now, more people are living together, with many young adults living with their parents or renting."

2014 does not seem like it will make things easier for this group, said Kolko, who points out that while there might be more mortgage credit available because fewer people are refinancing now, there are also new government regulations, designed to protect borrowers and lenders, in the pipeline that may hinder lenders.

Yun said the mortgage rules, which will be rolled out on January 10, are an overreaction since lenders are already much more cautious after the housing bubble. He said that while he hopes the new “qualified mortgage” (QM) will not be too disruptive, it could make underwriting even tougher since lenders will now be legally liable.

“Overall, to see a positive 2014, we need an accumulation of job creation, which leads to household formation,” said Yun. “So, if 2 million more jobs are created in 2014, which is what we are expecting, there will be an increase in housing demand… and hopefully there will be some relaxation in the underwriting standards so that first-time home buyers can participate in the housing recovery and wealth gains in 2014.”

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Christina is on Twitter @ChristinaScotti