The forecast for 2014 includes a few bright spots, a couple of looming clouds, and some normalcy expected to precipitate the market, Realtor.com says in its outlook for the new year. Among the bright spots are the rising tide of positive equity and abating foreclosures. While 2.5 million homeowners rose from underwater during the year's second half, 7.1 million homeowners remain below water. However, "[t]he good news is that prices are expected to continue rising in 2014, which will lift more homeowners into positive territory."

The housing recovery continued as expected in 2013, but that's not to say there weren't a few surprises. "[T]he recovery accelerated a lot faster than we anticipated, which was great for sellers and for the 75 million homeowners who saw their home values appreciate," said Lawrence Yun, chief economist for the National Association of Realtors (NAR), in a post titled "7 Housing Trends for 2013." Another surprise for Yun was the large portion of cash purchases.

Federal agencies assured institutions that they will not base their judgments of a loan's safety and soundness on its status as a QM or non-QM loan.

While the housing market is showing some signs of promise, a few major indicators continue to lag, according to the latest Trulia Housing Barometer.

Despite a reported rise in homebuyer confidence in the third quarter--the first this year--unrealistic mortgage rate expectations could lead the housing recovery astray.

While the nation's negative equity rate continues to diminish--falling an estimated 7.4 percentage points since the start of the year through October--Lender Processing Services (LPS) says a new threat looms in the form of home equity loans. According to LPS' data, the average credit score for a borrower with a home equity line of credit (HELOC) originated in 2007 has fallen about 20 points since then, posing a threat to lenders who "are often on the hook for almost all of 2nd lien losses."

Freddie Mac's mortgage book of business declined at an annualized rate of 6.4 percent in October, marking the fourth consecutive month of declines.

Rising prices may be bringing some homeowners out from underwater, but tight credit will still preclude many traditional buyers from the market, according to a recent report from DataQuick.

Before the recovery, high volumes of distressed sales aligned with falling prices--but the script has flipped in the current market, Clear Capital says in a recent report.

For the first time in two years, national home values registered a decline for two straight months, according to the Zillow Real Estate Market Reports released Tuesday. Furthermore, while annual gains continue, they are cooling, according to Zillow. "The months-long period of annual home value appreciation rates in the 6 and 7 percent range was great while it lasted, but we knew it would not continue indefinitely," said Zillow's chief economist, Stan Humphries.