A Few Clouds Gather Around The U.S. Housing Jubilation

The most recent residential real estate data has come in very weak bringing some concerns surrounding the near term future for U.S. housing:

- Housing starts fell 9.2% and building permits fell 4.2%

- New home sales fell 8.1% with sales falling in every region

- Pending home sales fell 1.1% on an expectation of 1.1%. There was a 2.6% rise in existing home sales but the pending home sales (which fell 1.1%) provide an better estimate of the market moving forward

- Case Shiller home prices fell 0.3% month over month, which was the first drop since 2012 on expectations of a 0.3% gain

- Mortgage applications fell 2.2% for the week ending July 25

- Builder sentiment remains strong but could fall back down to the reality of mortgage apps:

- Housing starts on a long term chart remain at depression lows:

- The homeownership rate has continued its decline:

This is due in large part to many young Americans under 35 delaying purchases because they are drowning in college debt and struggling to save for a down payment.

The 30 year mortgage rate reached a short term top around 4.5% to start 2014, but has fallen back to about 4.15% in recent weeks. The weakness in housing is occurring alongside a decline in rates making the data important to watch in the months ahead.