The gradual rebound in the housing market is setting the foundation for a broader economic recovery, says Liz Ann Sonders, chief investment strategist at Charles Schwab.

Housing starts soared 15 percent in September from August to the highest level in four years. And in August, the S&P/Case-Shiller index of home prices in 20 cities rose 2 percent from a year earlier, the biggest gain since July 2010.

"Just about every metric in housing is starting to turn here," Sonders said at an investment conference, according to CNBC.

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"People are still underestimating the impact that this is going to have. What people are underestimating is the ripple effect of confidence."

Sonders notes that the housing market has been able to withstand the European debt crisis and the impending fiscal cliff. Still, the government needs to avoid the cliff to keep the positive momentum in housing and the economy as a whole, she says.

Other experts are bullish on housing too.

“It’s no longer a question of whether the industry is rebounding,” Larry Sorsby, chief financial officer of homebuilder Hovnanian Enterprises, tells Bloomberg. There is clear evidence that we have bounced off the bottom and are in the midst of a recovery.”

Russell Price, senior economist at Ameriprise Financial, agrees. "The improvements we've seen are very sustainable and very solid," he tells Reuters. "They're on very firm footing in the housing market."

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