Rising interest rates and housing supply are likely to push Australian home prices lower in 2018, and they won't rise again until 2021, according to a report by ratings agency Moody's and housing market analytics business CoreLogic.

Detached housing prices are forecast to rise 5.6 per cent this year, before sliding 0.6 per cent in 2018, dropping another 0.3 per cent in 2019, and stay flat in 2020, according to the CoreLogic-Moody's Analytics Australian Home Value Index Forecast.

The main drivers of the falls will be rising mortgage interest rates and dampened demand due to increased housing supply, the report says.

"The major banks have increased lending rates out of step with the central bank," the report says.