NEW YORK (TheStreet) -- Here's what you need to know about the housing numbers released Tuesday.
They weren't great. But they weren't terrible. For once, whatever was wrong was not really about the weather.
Overall, new homes sold at a seasonally adjusted annual rate of 440,000 in February -- meeting the average forecast in a survey by Econoday, and about 1% less than at this time last year.
That's the good part, which augurs fairly well for the spring selling season. It's a big deal for the economy because residential construction and related specialty trades are still more than a million jobs short of the pre-recession highs. A surge in construction offers hope for both employment and higher wages -- home building wages have climbed 5% in the last 12 months for which the government has reported data.
The bad news: The big dip in the numbers was sales in the western United States, where sales were down 27% from a year ago, to an annual rate of 95,000 homes. Since the weather wasn't a major factor in the West -- it has been dry in California and not snowy as it has been in the East and Midwest, for instance -- that's at least a mild concern.
Sales rose 20% in the southern states to 255,000 homes a year, so concerns about the economy may not be the problem. Instead, it may be that affordability is an issue in some markets, especially out west.
A new report by Trulia.com says the national housing market is still about 5% undervalued, but a larger number of local housing markets have seen home prices rise faster than local fundamentals should support. And they are concentrated in the west -- right of the top 11 California metropolitan areas are overvalued, Trulia's Jed Kolko says, out of 19 overvalued metros nationwide.
There's not any huge risk of a new housing bubble -- as Kolko points out, the Case-Shiller/Standard & Poor's House Price indexes show price growth moderating in recent months.
In a new report Tuesday, Case-Shiller said its 20-city home price index actually dropped 0.1% in January before seasonal adjustments. But the relative vigor of the recovery in months to come could vary depending on affordability, especially out west and in South Florida, Kolko's data suggest.
Home builder stocks are mixed Tuesday, so the market doesn't appear to be taking this news as a deal maker or deal breaker. With final winter storms rolling through much of the eastern U.S., the next big housing news to watch is the April sales, which will give a pretty clear indication of prospects for the full year.