Mixed Signals on U.S. Housing: Analysts Debate What's Ahead

New U.S. homes sales numbers are out today. They’re down 3.2% – though prices are up. That directly contradicts Tuesday's existing home sales figures – which showed sales up but prices down.

Chief economist at Payden & Rygel Thomas Higgins says we’re missing one important figure – the ratio of housing jobs to the overall sector. The average is 7% – but we’re up at just under 8% now. A market correction could cost as many as 1.1 million jobs over time. He sees housing dragging the market down for as many as three to four years – though its impact on GDP could lessen over the coming quarters.

Steven Wieting disagrees. He’s the chief economist at Citigroup. He says the figure to watch is single-family home sales as percentage of permits. Residential construction dropping relative to sales is a starting point for clearing out inventories. He doubts the drag could last years – it really depends on whether or not conditions – such as low interest rates and less U.S. exports – will exist to strengthen the housing sector.

Watch the debate on "Morning Call":