The market still has a long way to go nationally, but the healing process -- and a return to a normalized housing market -- is definitely well underway," said Jim Baird, chief investment officer for Plante Moran Financial Advisors.
Home prices have been helped in recent months by a number of factors, including tight inventory of homes available for sale, near record-low mortgage rates and a drop in homes in foreclosure. A decline in unemployment is also helping the housing recovery.
The housing recovery itself is helping support overall economic growth, as builders scramble to hire workers to meet the renewed demand. The lift goes beyond the impact of increased construction on the economy, as the rise in home prices lifts household wealth.
Rising home prices also reduce the number of people owing more on their mortgages than their homes are worth. That, in turn, can help them to refinance those loans at a lower rate, freeing up money to spend on other goods and services.