I'd suggest that for most people it would have an opposite effect. Higher house values only affect you in the positive once you sell, until then you have higher property taxes, higher insurances and potentially a bunch of other value affected expenses, making most worse off.
Also worth noting that people usually buy in the same market as they are selling, so they got more for their house and paid more for the one they subsequently bought.
1. People that don't own a home stop trying to save for a deposit as they think it's out of their reach. They end up spending it all instead of saving some of it
2. People that do own a home "feel" wealthier because of the rising equity in it and borrow against it for that new car, boat, boob job etc... The Bank's are happy to lend as your LVR is only 40% and at 6% p.a. interest it's much cheaper than hire purchase.