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What housing market weakness?

I keep seeing references to the "renewed weakness" in the housing market, which is supposedly revealed in the recent decline in new home sales, housing starts, mortgage apps and refis. But this chart, which is a cap-weighted index of the equities of major American homebuilders, shows that the market's outlook for the residential construction sector hasn't changed at all since last August. Yes, we've seen a drop in home sales, but that came on the heels of a significant rise. New home sales, existing home sales, building permits, and housing starts are all still up over the past year, despite some recent weakness. The market may be looking for an excuse for a correction, but I don't see any sign of legitimate or emerging weakness.

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