Home prices will likely increase 7 percent in 2013, due to tight inventory, high affordability levels, and a stronger economy, according to JPMorgan Chase in its April report. Helping to lift prices, bank analysts say, is the decrease of distressed sales and the higher use of short sales. 

"However, unemployment is still elevated and we see no signs that lending standards will ease significantly in the near term," analysts with JPMorgan Chase said in the report.

Still, analysts are upbeat about the progress in the housing market. For example, the median time for all homes on the market was 74 days in February -- which is a 24 percent drop from the 97 days in the same month last year. 

One out of three homes on the market in February sold in less than a month, according to the JPMorgan report.

Meanwhile, John Stumpf, CEO of Wells Fargo, recently said in a conference call that a housing shortgage -- particularly in lower end and starter houses -- is helping to boost homebuilding and prices. He said the improving housing market will help limit the costs of faulty or defaulting mortgages as more borrowers start to regain equity.

Wells Fargo, the country’s largest mortgage lender, reported a record $5.17 billion profit in the first quarter. The bank has recently added employees in some markets to help meet the higher demand being caused by the housing recovery. The lender has also cut its time to close on a loan from 90 days to 60 days.

Source: “Housing inventory, buyer demand are market drivers: JPMorgan,” HousingWire (April 11, 2013) and “Wells Fargo CEO Sees Housing Shortage Helping Mortgage Results,” Bloomberg (April 12, 2013)