You probably don't think of unrest in the far away Middle East as having anything to do with the housing market here in the U.S. You should.

The weekly mortgage applications say it all.

Despite the rate on the 30-year fixed falling below the psychologically important 5 percent line, mortgage applications to purchase a new home and to refinance both dropped; yes, there was a holiday involved, but the four week moving average is also down, despite mortgage rates coming off their Egypt-unrest surge.

Remember, rates track yields on the 10-year Treasury, which have been volatile due to the unrest abroad, but not THAT volatile: Less than half a percentage point.

Rates are one thing, but uncertainty weighs heavier on potential buyers, and rising oil prices may outweigh both.

"It’s the spring season. This is where new home buyers come out looking to buy a home," says FBR's Paul Miller. "If gas prices have gone up significantly, it’s going to cut into the foot traffic, and we’re really concerned with what that’s going to do to housing market."

Right now what the stumbling housing recovery needs above anything else is stabilization. Stable interest rates, stable gas prices and rest overseas are crucial to consumer confidence, which I continue to believe is the greatest impediment, above all economic issues, to housing's recovery. Of course Peter Boockvar over at Miller Tabak makes an excellent economic argument as well:

"Assuming mortgage rates remain in their current range, the state of housing really comes down now to the pace of household formation, which also has much to do with the state of the labor market. With higher commodity inflation upon us, the fragile state of the economy will likely result in still mediocre hiring (relative to previous recoveries) and housing will remain distressed."

Political and economic unrest, rising gas prices, higher commodity prices, and a very concerned consumer versus excellent affordability, huge inventory, great distressed property deals and eager sellers.

Let the Spring games begin!

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