iStockWhile home buyers can expect 2014 to be a bit friendly in terms of market conditions, Zillow believes that home ownership will likely decline this year. In a recent report, the real estate information company pointed to four trends that are likely to emerge in this year’s real estate market. These include rising home values, increasing mortgage rates, altered lending standards, and lastly, a decline in owner-occupied housing.

Dr. Stan Humphries, chief economist for Zillow, said: “This year, home value gains will slow down significantly because of higher mortgage rates, more expensive home prices, and more supply created by fewer underwater home owners and more new construction. For buyers, this is welcome news, especially for those in markets where bidding wars were becoming the norm and bubble-like conditions were starting to emerge.”

Around the U.S., Zillow says that that home values will rise by 3 percent in 2014. This is good news for current home owners who are considering selling this year. For buyers, mortgage rates will likely increase, which is why buyers are encouraged to make a move as soon as they can.

Erin Lantz, director of mortgages for Zillow, sheds more light on the subject of lending. She adds: “While this will make homes more expensive to finance—the monthly payment on a $200,000 loan will rise by roughly $160—it’s important to remember that mortgage rates in the 5 percent range are still very low. Because affordability is still high in most areas relative to historic norms, rising rates won’t derail the housing recovery.”

Humphries went on to say: “The housing bubble was fueled by easy lending standards and irrational expectations of home value appreciation, but it put a historically high number of American households—seven out of 10—in a home, if only temporarily. That home ownership level proved unsustainable and during the housing recession and recovery the home ownership rate has floated back down to a more normal level, and we expect it to break 65 percent for the first time since the mid-1990s.”