Higher home prices are making for slightly happier consumers. This is a trend that is helping holiday sales and other consumer-driven parts of the economy, while business sits on the sidelines, worrying about the 'fiscal cliff'.

Home prices increased in September in most major U.S. cities, more evidence of a housing recovery that is providing a lift to the fragile economy. The national index measuring prices in 20 cities rose 3 percent in September adding to the gain of 3.6 percent in the July-September quarter.

U.S. consumer confidence rose this month to its highest level in almost five years, pushed up by steady improvement in hiring. Americans are more optimistic because the see the job market getting better.

Consumer spending drives nearly 70 percent of economic activity. The level of this index is up, however it is still slightly below a reading that is consistent with a healthy economy.

Investors are still being cautious of the fears of the 'fiscal cliff' that could hit at the end of the year dealing with the nations debt. Despite the looming worries, Americans appear to be in the mood to spend money and that includes buying homes.

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