Despite the strong gains, home prices are still down approximately 28-29 percent from their peaks in the summer of 2006 and are now back at levels not seen since late 2003.
While prices continue to improve, there are still headwinds, specifically a relatively weak employment picture and a tight mortgage market. Existing home sales are also recovering far faster than new home sales, and much of the gains in new home construction is in multi-family apartments, as single family housing starts lag.
(Read More: Record High New Home Prices to Grow)
"Housing is making a positive impact on the economy, if one goes through the GDP numbers, residential construction is adding to economic growth," said Blitzer. "But when you look at this, buying and selling existing homes, is recognized, we all feel good, the prices are going up, it doesn't add anything to GDP."
—By CNBC's Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC
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