At 10 a.m. as Bernanke began his Congressional testimony and subsequent Q&A we learned that new home sales surged 15.6% in January to an annual rate of 437,000, but this is old news given the slippage in home builder confidence in February.

Despite this anomaly the National Association of Home Builders indicates that a double-digit pace of new home sales will be difficult to sustain given the challenges faced by the industry; credit availability, difficult appraisals, dwindling supply of prime lots, spot shortages of skilled labor and rising materials costs. The supply of new homes remain near historical lows at 150,000.

Also at 10 a.m. we learned that the Conference Board's reading on Consumer Confidence rose to 69.6 in February versus a downward revised reading of 58.4 in January. While this reading was above expectations, keep in mind that this index is tracking well below the neutral 90 to 100 range, as shown by the chart below, courtesy of Dshort Advisor Perspectives .

At 3 p.m. Tuesday the NAHB issued a press release citing the concerns I have been talking about over the past several weeks. The headline was "Tight Credit, Flawed Appraisals and Erratic Supply Chain Hurt Jobs, Housing."

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