NEW YORK (TheStreet) -- With the major U.S. indices reaching new highs almost daily, investors may have concluded that the U.S. economy has recovered. After all, unemployment levels have dropped to just 6.1%, inflation is in check and the Federal Reserve is winding down its generous bond buying program.

What else is left for Wall Street to do but fist-pump and proclaim, "mission accomplished"?

But the fact of the matter is that the U.S. economy is on shaky ground. Yes, unemployment is down, but the underemployment rate remains above 12%, wages continue to stagnate, and debt levels remain dangerously high.

Even the U.S. housing market, the so-called silver lining, is tarnished -- unless, of course, you have lots of cash and are buying high-end real estate. In fact, when it comes to sustained economic growth, U.S. housing could be the greatest hurdle in the economic recovery.

According to the Case-Shiller Home Price Index, U.S. housing prices are up more than 25% since the beginning of 2012. However, they still need to climb more than 20% to just reach their prerecession highs.

More specifically, in June, existing-home sales climbed 2.6% to a seasonally adjusted annual rate of 5.04 million from 4.91 million in May. On the plus side, this is the highest pace since October 2013; on the other hand, June existing-home sales are down 2.3%, below the 5.16-million-unit level reached last year.

First-time home buyers, a benchmark for how well the U.S. economy is doing, accounted for just 28% of all purchases in May and June. The 30-year average -- and a number that economists consider healthy -- is 40%. For an economy that's apparently rebounding, the annual decline is worse. In June 2013, first-time home buyers accounted for 29% of all purchases, and in June 2012, the year the U.S. housing market started to rebound, they accounted for 32% of purchases.

Unfortunately, first-time home buyers continue to be squeezed out of the U.S. housing market by wealthy investors. All-cash sales accounted for 32% of existing-home sales transactions in June, up from 31% in June 2013 and 29% in June 2012.

What about new-home sales?

Same story, but a little bit worse. In June, new-home sales tanked 8% month-over-month and 11% year-over-year to a seasonally adjusted rate of 406,000. Amazingly, the data comes with a margin of error of plus or minus 12.3% month-over-month and 14.4% year-over-year. However, because newly built home sales only account for around 19% of all home buying activity, economists aren't too worried.

On the plus side, new-home sales have climbed 20% since the beginning of 2012. But to reach their prerecession level, new-home sales need to climb an additional 240%.

Who's buying?

The number of new homes sold in June at prices under $150,000 fell 33% year-over-year to 2,000. New-home sales in the $150,000 to $199,999 range also declined 33% year-over-year to 6,000. The number of new-home sales in the $200,000 to $299,999 range was down 13% at 13,000, while the number of buyers in the $300,000 to $399,999 range slipped 25% year-over-year to 6,000 units.

The clear winners? The number of new homes sold between $400,000 and $499,999 held steady year-over-year at 4,000 units; homes in the $500,000 to $749,999 category climbed 67% to 5,000 units. Homes listed at $750,000 and up also held steady at 1,000.

With high underemployment, high debt levels, stagnant wages, a sluggish economy and rising home prices, is it really any wonder why new-home and existing-home sales data is skewed the way it is?

The spring thaw was supposed to usher in a big rebound in the U.S. housing market. After the harsh winter, home buyers were going to jump back into the market with reckless abandon. This is good news when you consider that the U.S. housing market accounts for roughly 18% of the nation's gross domestic product growth.

Strangely, the cold weather didn't affect wealthy home buyers or investors, and the warm weather hasn't helped first-time home buyers step onto the property ladder.

Despite the fact that both U.S. and global GDP growth have been revised downward for the remainder of the year, many investors remain bullish on the U.S. housing market.

Bullish investors might want to consider a residential construction company like Toll Brothers (TOL) - Get Report, D.R. Horton (DHI) - Get Report or Lennar (LEN) - Get Report. These investors may also consider stocks that rely on the U.S. housing market, like Sherwin-Williams (SHW) - Get Report, Home Depot (HD) - Get Report or Patrick Industries (PATK) - Get Report.

If you don't think the U.S. housing data looks all that encouraging, you could short these same stocks or any other that relies heavily on the U.S. housing market.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates SHERWIN-WILLIAMS CO as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate SHERWIN-WILLIAMS CO (SHW) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, impressive record of earnings per share growth, increase in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

SHW's revenue growth has slightly outpaced the industry average of 8.5%. Since the same quarter one year prior, revenues rose by 12.1%. Growth in the company's revenue appears to have helped boost the earnings per share.

SHERWIN-WILLIAMS CO has improved earnings per share by 19.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SHERWIN-WILLIAMS CO increased its bottom line by earning $7.26 versus $6.01 in the prior year. This year, the market expects an improvement in earnings ($8.68 versus $7.26).

The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 13.3% when compared to the same quarter one year prior, going from $257.29 million to $291.45 million.

The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Chemicals industry and the overall market, SHERWIN-WILLIAMS CO's return on equity significantly exceeds that of both the industry average and the S&P 500.

Net operating cash flow has slightly increased to $414.70 million or 5.46% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -14.28%.