NEW YORK (CNNMoney) -- Ten hard-hit housing markets will record double-digit price increases through 2013, according to a report Wednesday.
And with mortgage rates low, many house hunters have already started to pounce on bargains, said David Stiff, chief economist at Fiserv, a financial analytics company that prepared the forecast.
"Some markets may have overshot to the downside, and people are jumping in to try to catch the bottom," Stiff said.
Nationwide, home prices will start rebounding late this year and gain an average of 4% a year over the next five years, Fiserv projects.
In a separate report released Wednesday by the National Association of Realtors, the national median home price declined by just 0.4% in the three months ended March 31 compared with the same period in 2011.
About half of the 146 metro-area markets surveyed by NAR showed a price increase, as buyers make inroads into the supply of homes for sale all across the country. National inventory has dropped by 22% compared to a year earlier.
"Given the steadily dwindling supply of inventory and notably higher listing prices that are being negotiated today, prices are expected to show further improvements in the near future," said Lawrence Yun, NAR's chief economist.
Home prices will also be driven higher as banks opt for short sales instead of repossessions. Repossessed homes sell for between 25% and 50% less than comparable homes sold by conventional sellers, according to Daren Blomquist, a spokesman for RealtyTrac, which markets foreclosed properties.
Bank repossessions often go through lengthy foreclosure processes and long periods of vacancy, during which they may deteriorate and lose value.
Fiserv's Stiff forecasts that Madera, Calif., will produce the largest home price gain over the next two years. This market bubbled during the housing boom, with the median home price jumping above $300,000, according to the National Association of Home Builders.
Prices have since tumbled 53% off their peak, to about $125,000. Fiserv is projecting a price jump of 21.5% by the end of 2013 with 16.5% of that increase coming next year.
|What we want Apple to unveil at WWDC|
|Millennials squeezed out of buying a home|
|7 traits the rich have in common|
|Big Data knows you're sick, tired and depressed|
|Your car is a giant computer - and it can be hacked|
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.98%||3.95%|
|15 yr fixed||3.05%||3.05%|
|30 yr refi||4.05%||4.03%|
|15 yr refi||3.12%||3.11%|
Today's featured rates: