Biggest Home Prices Rise in 6 Years

Home prices are accelerating in most local markets. CoreLogic, a real estate data provider, says average home prices rose 8.3 percent in December compared with a year earlier, the biggest annual gain since May 2006. Prices rose last year in 46 of 50 states.

Home prices also rose 0.4 percent in December from the previous month: a healthy increase given that sales usually slow over the winter months.

SLIDESHOW: View the most expensive homes in the US.

Steady increases in prices are helping fuel the housing recovery. They're encouraging some people to sell homes and enticing some would-be buyers to purchase homes before prices rise further.

Higher prices can also make homeowners feel wealthier. That can encourage more consumer spending.

CoreLogic says January home prices, including distressed sales, are expected to rise by nearly 8 percent on a year-over year basis from January 2012, and fall by 1 percent compared with December, reflecting a seasonal winter slowdown.

Excluding distressed sales such as foreclosures and bank short sales, the average home price index is expected to rise more than 8.5 percent compared with the year before.

"December marked 10 consecutive months of year-over-year home price improvements, and the strongest growth since the height of the last housing boom," says Mark Fleming, chief economist for CoreLogic. "We expect home price growth to continue in January."

Richard Davies Business Correspondent ABC NEWS Radio ABCNews.com twitter.com/daviesabc