“Consistent, positive reports on housing starts, permits, prices, new-home sales and builder confidence in recent months provide further confirmation that a gradual but steady housing recovery is under way across much of the nation,” Crowe said. "However, stubbornly tight lending standards for home buyers and builders, inaccurate appraisals and proposals by policymakers to tamper with the mortgage interest deduction could dampen future housing demand.”

The housing recovery varies by locale, with some regions doing very well and other still struggling, Crowe said.

“We are transitioning from a very low demand level, where most people hold themselves out of the marketplace, to a case where supply will start being the problem,” Crowe said. “As we begin to build more homes to address that supply, the new home stock will be a much more important element of the recovery.”

The association’s index of improving housing markets continues to grow. When the index was started in September 2011, only 12 metro areas out of 360 nationwide were on the list. As of December 2012, more than 200 markets are on the list.

The index is made up of figures from local housing permits, prices and employment levels.

"One reason we have seen such a significant jump in the (index) is because house prices are beginning to recover,” Crowe said. “House prices bottomed out early in 2011 and since early 2012 we’ve seen a 6 percent increase on a national basis.”

Sales of new single-family homes nationwide are expected to grow from 307,000 in 2011 to 447,000 this year and 607,000 by 2014.