CHICAGO, Dec 20 (Reuters) - Home sales across the United States are expected to end 2021 up 7.1%, but are forecast to decline over the next two years as limited supply, along with higher mortgage rates and prices, cool the residential real estate market, Fannie Mae said on Monday. The government-sponsored enterprise"s Economic and Strategic Research Group raised its 2021 home sales growth projection from a prior 5.3%, citing an expected strong year-end surge in home buying. A 7.1% increase would be just under 2020"s 7.3% jump. However, the forecast showed home sales declining 1.4% next year due to limited listings and other factors, and falling 3.8% in 2023. "The expectation that mortgage rates will continue to drift upward, averaging 3.2% in 2022, coupled with additional home price appreciation, are likely to make affordability a growing constraint on home sales in the new year," Fannie Mae said in a statement. It added that moves by the U.S. Federal Reserve to tighten monetary policy to combat inflation "will combine with ongoing supply issues and still-appreciating home prices to slow sales activity."