Housing will be key to the nation’s continued economic growth and will have a significant impact on the Gross Domestic Product in 2013, Fannie Mae reported Jan. 24 in its 2013 Economic Outlook report.

The housing recovery has transitioned to a faster upward track, boosted by an improving labor market and low mortgage rates. Overall, home sales, home prices and home building activity, as well as homebuilder confidence appear to be on the upswing, having risen to multi-year highs, the report noted.

“As fiscal policy debates subside later in the spring, we expect to see some upward trend in economic activity, with growth accelerating moderately in the second half of the year,” Doug Duncan, chief economist at Fannie Mae, said in news release accompanying the report. “That momentum will find support in the form of continued, albeit slow, improvement in the housing sector.”

Fannie’s report also indicated that new and existing home sales have been trending higher while the inventory of available homes for sale has decreased, pointing to a more balanced housing market in the near future. Meanwhile, the report projected existing home sales will trend up, reaching 6 million units in 2016.

The report also noted that lenders have stepped up efforts to implement timely short sales and other foreclosure alternatives, which buttress rising home price trends and decreased mortgage delinquency rates.

Fannie predicted purchases of mortgage originations will rise to $642 billion in 2013. However, refinancings will decline slightly, claiming a 60 percent share of the mortgage financing market in 2013 as compared to 73 percent in 2012.