Mortgage rates say you are lying.

Should You Worry About More Bad Housing Numbers?

Since interest rates began rising in May, the real estate market has been preparing for a major storm. A downpour arrived Wednesday as the Commerce Department reported the worst drop in housing starts in almost a year- confirming fears of investors and homeowners that a pullback in demand might dent the recovery.

But there was no panic in equity markets over the housing flop, and little fear that the sector will slip back into the hole it fell into in 2008. Housing as a whole appears to be holding its own, even with mortgage rates going up. (The Mortgage Bankers Association last week showed the average 30-year mortgage at 4.68 percent. That's nearly a full percentage point above last year.)

I've been tracking mortgage rates since I refi'd my rental in mid January. I have a reset in 2016 on my primary, so I'm in an all out sprint with the banks.

When rates started creeping up - I basically chuckled. At the time I made a concentrated bet the market could not survive 2006 rates or anything near it (which I'm still at), and it turns out I was right judging from today's news. However, even I was taken aback at the numbers. Still, the cheerleaders are everywhere. So, I went over to look at the rates which were really solidly in the 4.5-5% range a week ago. A constant climb from 3.25 I locked in Jan. Now they have slipped back to about 4.20%-ish range. That tells me the banks are starting to feel a drag.

I personally believe there is a different dynamic in housing psychology this time. In 2008,9,10,11, and 12 it felt like you would never stop falling. Now there is some question about that reality. At some point there is more people than houses. I don't know if that point is now.

Just as a side note - when I tell you guys I've managed to refi my primary - the market is still one to two years from peak. It's hard to know how many of those people just walked away. I put 20% down on my place at a time when that was pretty uncommon.