The housing market is hitting a major bump on the road to recovery, with home sales and construction underachieving in January. Still, several housing-related companies are reporting better-than-expected earnings. The apparent disconnect may lie entirely in home prices.
Toll Brothers, the luxury home builder, and Realogy, a real estate brokerage company whose brands include Coldwell Banker and Sotheby's International, reported quarterly earnings Tuesday that surpassed expectations.
Rising home prices are playing a big role in these companies' bottom lines.
"We delivered more homes at higher prices this first quarter than one year ago. This higher delivery volume, coupled with price increases from late 2012 and early 2013, drove our first quarter growth in revenues, earnings and margins," Toll Brothers CEO Douglas Yearley Jr. said in a statement.
"Prices will have a positive effect on home sales," Realogy CEO Richard Smith said during a conference call Tuesday with investors.
(Read more: Home prices end 2013 on strong footing; Dec. beats estimates:Case-Shiller)
But fast-rising home prices, largely due to a lack of supply on the market, are precisely what others say are stalling sales and weakening the outlook for the spring market.
"I think that there's pitfalls ahead," economist Robert Shiller said on CNBC. He even suggested the market looks like 2005, when home prices rose too far too fast and then crashed. "This momentum will dissipate," he said.
Home prices were up 11.3 percent nationally on the S&P/Case-Shiller Index for the fourth quarter of 2013 from a year ago. The difference between now and 2005 is that prices now are being fueled by short supply and not by cheap and easy credit as they were during the last housing boom. Affordability is the victim, however, hurting first-time buyers, who fell to their lowest share on record in January, according to the National Association of Realtors.
"Higher home prices and mortgage rates are taking a toll on affordability. Mortgage default rates, as shown by the S&P/Experian Consumer Credit Default Index, are back to their precrisis levels but bank lending standards remain strict," wrote S&P's David Blitzer.
This is precisely why Toll Brothers, which builds higher-priced homes, is doing so well. Its buyers are wealthier with higher credit scores and the ability to use larger down payments. First-time home buyers are not, in general, buying Toll Brothers homes.
(Read more: Cost of owning a home is spiking in 2014)
Sales in fact are booming on the higher end compared to the lower end, where investors had reigned but are now moving out. Sales of homes priced above $750,000 rose nearly 20 percent in January from a year ago, while homes priced below $100,000 fell 19 percent, according to the Realtors association.
Toll and Realogy lowered sales expectations for the first part of 2014, even though Realogy's CEO did not agree that affordability is slowing the market.
(Read more: Spring thaw may not heat up this housing market)
"Affordability on a relative basis is still very attractive," Smith said in an interview. "We think pricing is going to pull more people back into the market, but you cannot predict inventory levels for the year based on the first quarter."
—By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick.
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