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While existing and new home sales normalize, a strong counter trend can be seen in housing starts. January's seasonally adjusted annual rate of groundbreaking on new home construction was the highest level since 1973.

Home sales, as you're well aware, are mostly financed by companies taking little risk – they turn around and sell the note on the secondary market, and it may be backed by federal insurance to begin with. In contrast, small to medium sized local banks fund most new residential construction, in the form of business loans to local builders, not mortgages.

Because these lenders hold all the risk if the builder goes under or can't sell the home, they tend to be more conservative and tighten builders' lines of credit when they see problems coming. They have their own money on the line. A surge in housing starts, even accounting for milder January weather in much of the country, is a positive sign for the housing economy going forward.