Despite improved market, not all sellers are smiling

Inflation, credit and cash-outs could undermine housing affordability

2012 was the best year for home sales since 2007. The inventory of homes for sale dropped, helping to stabilize the market. In most places, home prices appear to have hit bottom for this cycle. The median sale price rose in 2012 as the number of foreclosure sales decreased. And interest rates remain at historic lows.

Buyers who were resistant to buying into a plunging market are preapproved and ready to go. Many want to buy sooner rather than later, before interest rates and prices start moving up. In some markets, this is easier said than done.