Although home prices across the nation are still 29% below their peak, they jumped 8.1% during the 12 months that ended in January, according to the Standard & Poor's/Case Shiller 20-city home price index.

The steady home price increases are enabling recovery in the housing industry in an effort to add to the economic growth throughout the country. These higher home prices are believed to encourage potential home buyers into purchasing a home before the prices continue to rise. Another contributing factor to the increase in home sales is the record low mortgage rates.

According to Jonathan Basile, director of economics at Credit Suisse, Over time, persistently rising house prices also boost household wealth, make lenders more willing to lend because the asset theyre underwriting is appreciating, and ease pressure on local government budgets that get revenue from property taxes.