Each new housing data point is worse than the last, and they are prompting a leading industry analyst to say the market is in a correction.
Single-family housing starts fell more than 13 percent last month from a year earlier, according to the U.S. Census. Building permits, an indicator of future construction, were down nearly 2 percent.
This followed a sharp drop in homebuilder sentiment to the lowest level in more than three years, according to the National Association of Home Builders.
"I definitely think we're in a correction," said John Burns, CEO of John Burns Real Estate Consulting. "Sales, according to our survey last month, were down 19 percent year over year. ... I would call that a correction."
Burns points to higher mortgage rates, along with the surge in home prices over the last few years, as the culprit. Mortgage rates are a full percentage point higher now than a year ago. Half of Americans can only afford a $230,000 mortgage, according to Burns, and the builders in good locations just can't build at that price. Eleven of the top 19 builders have an average sales price above $400,000.