Economists have been cranking up their home price expectations. Some expect home prices to rise 8% in 2013. Housing pundit Ivy Zelman has said we're in "nirvana" for housing.

But recently we've seen some signs that the recovery is slowing down.

First, building permits have declined since January. And though housing starts have come in strong, up 7% in March, this was driven by a 31% rise in multifamily starts. Single family starts were down 4.8%. Bank of America's Michelle Meyer has previously pointed out that in this recovery multi-family rentals are creating a larger part of the housing stock.



Second, homebuilder confidence, climbed to its highest level since 2006 in December, rising to 47. After rising for eight straight months, it stalled in January and has decreased since, falling to 42 in April.



Third, homebuilders were frustrated about difficulties in "obtaining construction credit and overly restrictive mortgage lending rules," according to NAHB chairman Rick Judson. Meanwhile, Paul Diggle at Capital Economics previously warned that "capacity constraints in lenders’ mortgage departments are one of the few remaining bottlenecks in the housing recovery."

"Lenders’ need to manage the level of mortgage applications given their constrained processing capacity is one explanation for why mortgage rates are at record highs relative to MBS yields and credit scoring criteria are very strict. All of this has helped contribute to the marginal role being played by mortgage-dependent buyers in the housing recovery."



Fourth, foreclosure starts have begun to pick up again.



As a bonus, here's Goldman Sachs' housing swirlogram that shows we're not in the expansion stage yet.







