She is famous for calling the top of the housing boom and the bottom of the housing crash. Then last spring analyst, Ivy Zelman proclaimed that the nation was in "housing nirvana." Under fire, she was revising her estimates lower by fall. In a rare interview, she explained herself.
"I think nirvana took a pause," Zelman told CNBC on Wednesday. "During that time home prices were surging and we had very attractive affordability, and a few months after I was on we saw rates surge about 100 plus basis points and we saw a pause. The consumer was rationally responding to the surge in prices and the backup in rates."
She did not, however, back off her bullishness in the nation's home builders.
"Nirvana is not far around the corner," she added.
Zelman blames much of the decline in sales on lack of supply. Inventory of new and existing homes for sale is low across the nation, and housing starts were weaker in January as well.
"What we hear from builders right now, they did not have enough communities to meet demand in 2013," she said. "They were caught by surprise by the surge in demand, so they didn't have enough developed lots to open up new communities. This year they caught up, they're very prepared, we're going to have double digit increases in new communities."
(Read more: CEOs are bucking housing's bad numbers)
Zelman, however, does not agree with government numbers released Wednesday showing a 9 percent jump month-to-month in sales of new homes. The margin of error in these numbers are wide, due to the small sample. In fact, since the numbers are all rounded up on a nonseasonally adjusted basis, January sales were flat.
Builders have been raising prices due to higher costs for land, labor and materials; builder sentiment dropped dramatically in February, and these, not weather, were the primary reasons they cited. The difficulty for most new home buyers is that they depend on credit, unlike many buyers and investors in the existing home market. More than one-third of existing home sales in January were paid for in cash, according to the National Association of Realtors.
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That may be changing. Some large-scale investors in distressed housing are now looking at new construction. The build-to-rent trade is still in its infancy, but with so little supply of existing homes for sale and such high rental demand, there may be a future in it.
"I continue to believe that the all-cash buyer has moved into the new home market with intentions to rent and that could have been a help to sales in January because mortgage applications to buy a home fell to the lowest level since 1995 in today's MBA data," Peter Boockvar of the Lindsey Group said in a note to investors.
While Zelman says it is still a tiny percentage of the new home market, she did not dismiss the potential.
"I think that there is interest in the new home market for the investors, but I'd say it's a pretty small percent of the market, and if it can make sense from a return perspective, I think that they will move forward on that," she said.
(Read more: US sales of new homes leap 9.6 percent in January)
Interestingly, Zelman did not harp on rough weather for the recent slowdown, as so many other analysts have. She also played down the continued drop in mortgage applications—to their lowest level in nearly two decades. Instead, she points to increased competition among lenders, who have lost so much refinance business due to higher rates. That, she said, will help to ease credit. She does warn that if interest rates continue to rise, that will be a concern.