Cushman & Wakefield may be the first to plant the flag to declare that the housing market has recovered, but they are walking back any more confidence than that about where the market will go in 2014.

The firm’s National Housing Market Overview covers 2013 and looks into 2014, and it doesn’t feel as good about 2014 as it did last year.

Affordability issues, mortgage rates and other headwinds face the housing market over the coming eight months. This is exacerbated by a weak job market, affordability challenges, and the declining pool of first-time homebuyers.

“On the positive side, home prices have been increasing, foreclosures clearing, negative equity positions declining and permit activity increasing,” the report says. “Homebuilder and consumer confidence, which was moving positive, turned slightly to the negative by the end of the year. Even so, most economic and housing metrics suggest the 2014 housing market will continue toward the positive, although unlike the first half of 2013 in which pent-up demand dramatically increased home pricing and sales activity.”

It states that there are a number of positive indicators.

“Home prices and permit activity have been increasing while foreclosures and negative equity positions declining. Population increases continue in the traditional growth markets and interest rates remain favorable for qualified buyers,” the report says.

It also highlights the challenge to the housing market coming from the weakness in the employment situation.

“The key factor in demand is employment. Long-term job growth across all sectors is a pre-requisite to long-term positive momentum in housing market conditions. Even so, most economic and housing metrics suggest the 2014 housing market will demonstrate improvement over 2013,” it says.

Cushman & Wakefield also expects a dramatic change coming for Millennial homebuyers, who so far have been dealing with student debt, slow pace of household formation, and affordability challenges. Cushman expects a significant increase in household formation coming in the next five years.

The report is positive about ongoing population growth in the Sunbelt, from the Southeast all the way through to the West Coast, and says the aging of Baby Boomers will likely play a key role in the future as well.

“A significant demographic shift involves the Baby Boomer generation, covering an approximate 17-year span, entering retirement age,” the report says. “This sizeable portion of the population that represented the traditional buyers of residential properties in the entry-level and move-up markets has become sellers into the move-down markets. Some retirement-aged sellers are unable to sell as home equity levels declined.”