Why housing could lag the market

Housing is slipping further and further out of reach for the average American homebuyer.

As home prices continue rising, wages aren't able to keep up, according to data compiled by real estate website Trulia.

While the change in asking prices for homes was up 8.1 percent in the 100 largest metro areas, wages moved up only a fraction of that rate.

"In fact, average wages per worker rose less than 1percentin 2013 in all but one of the 10 metros with the largest price increases," writes Trulia's chief economist, Jed Kolko."Nationally, asking prices (year-over-year in June 2014) rose faster than wages per worker (year-over-year in 2013) in 95 of the 100 largest metros."

(Watch: Housing still too expensive despite positive signs)

Erin Gibbs, equity chief investment officer at S&P Capital IQ, believes that two factors may ultimately make the situation improve. One is the increase in June nonfarm payrolls by 288,000 coupled with upward revisions in April and May.

"Though wage increases were not there, we do see more people coming on and that unemployment lowering," Gibbs said.

Gibbs also thinks the recent upticks in light vehicle sales could predict added housing inventory in the months ahead. In March and May of this year, light vehicles sales broke above 1.5 million, the first time since 2007 according to Autodata.

"About 18 months ago, we saw that light vehicle sales popped about three to five months before the housing sales came up," explained Gibbs. "When we see employment going up, we see consumer confidence going up. This may be just a delay and we can see those housing starts continuing later on in the year."

(Read: Working for tips: It's even worse than the minimum wage)

But, those looking to play the housing sector should stay away from the ETF that tracks home builder stocks (ITB), according to Ari Wald, head of technical analysis at Oppenheimer & Co.

"From an investment perspective, I'd rather just buy the S&P 500," said Wald. He sees the ITB as continuing to trade between $23 and $26 per share as it has for much of 2014.

However, a chart of the ITB's price divided by the price of the S&P 500 gives Wald concern for the ETF. "Housing has underperformed the market over the last year," he said. "This isn't the type of underperformance that's becoming less bad, in fact we think it's a type of underperformance that can accelerate lower. So, outside of a trade, I'd rather buy the S&P 500."

To see the full discussion on housing and the ITB, with Gibbs on the fundamentals and Wald on the technicals, watch the above video.

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