ATLANTA, Jan. 22, 2014 (GLOBE NEWSWIRE) -- Despite climbing interest rates and rising home prices, 2014 looks to be a year of continued recovery for the housing market.

Home prices are expected to increase around 3.7 percent, according to the National Association of Realtors (NAR). The unemployment rate fell to 6.7 percent in December, and the Federal Reserve expects it to fall below 6.5 percent later this year for the first time in more than five years.

"The housing market may not return to its pre-recession 'normal' in 2014 or even 2015, and there will certainly be new challenges ahead," said Ilyce Glink, real estate expert and Managing Editor of the Equifax Finance Blog. "But with more Americans employed and able to buy homes, we should see the real estate market, especially new construction housing, continue to pick up steam."

Here's what to watch for in 2014:

Increased economic growth. According to Frank Nothaft, chief economist at Freddie Mac, economic growth is expected to increase from 2.5 percent to 3 percent. That rate of growth should create more jobs, empowering more Americans to buy homes.

Rising home prices. Home values will continue to rise, Nothaft said, but not as rapidly as they did in 2013.

"A cooling off in some of the hot markets isn't a bad thing," Glink said. "There were new bubbles forming and threatening to burst in some markets, and a slow-down could bring appreciation back to a more moderate rate."

If prices rise faster than income, however, housing affordability—how likely it is for middle-income families to be able to afford to buy median-priced homes—could dwindle, pushing some buyers out of the market.

Uncertain household formation. New households, created by divorce, graduating college students moving out on their own and new immigrants moving to the country, are a key part of the housing market.

Since the Great Recession began, household formation slowed well below historic norms, and may not rise much this year. According to Amy Crews Cutts, Chief Economist at Equifax, the problem boils down to young people who have slim job prospects and are financially insecure.

Burdened with student loan debt and struggling to find work, many millennials are living with their parents or with roommates instead of striking out on their own. This creates a void of buyers that could, down the line, impact the real estate market in the form of pent-up demand for homes.

More insights about the 2014 housing market are available in Glink's recent post on the Equifax Finance Blog.

About Equifax

Equifax Personal Solutions empowers consumers with the confidence and control to be their financial best. Find out more about Equifax's innovative suite of credit monitoring and identity protection products at www.equifax.com. Learn about identity theft and how to help protect yourself and your family at IdentityProtection.com. Get smart information on everything from credit to retirement, all in one place at the Equifax Finance Blog, blog.equifax.com.

Equifax (NYSE:EFX) is a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information they can trust. Equifax organizes and assimilates data on more than 600 million consumers and 81 million businesses worldwide. The company's significant investments in differentiated data, its expertise in advanced analytics to explore and develop new multi-source data solutions, and its leading-edge proprietary technology enable it to create and deliver unparalleled customized insights that enrich both the performance of businesses and the lives of consumers.

Headquartered in Atlanta, Equifax operates or has investments in 18 countries and is a member of Standard & Poor's (S&P) 500® Index.  Its common stock is traded on the New York Stock Exchange (NYSE) under the symbol EFX. In 2013, Equifax was named a Bloomberg BusinessWeek Top 50 company, was #3 in Fortune's Most Admired list in its category, and was named to InfoWeek 500 as well as the FinTech 100. For more information, please visit www.equifax.com.