The U.S. economy is sliding sideways with consumer sentiment down on higher gasoline prices and economists realizing a mild winter stimulated early economic activity, according to CoreLogic.

A weather-related upswing in economic activity during the winter can result in a sluggish spring since buyers spend earlier, creating a potential drop off in spring activity. 

Meanwhile, the housing sector continues to reflect two opposing trends: On one hand, household growth increased a slight 0.6% in 2011, said Mark Fleming with CoreLogic. This slow growth suggests the presence of pent-up demand, a factor that could later turn into home sales. Furthermore, home affordability levels are back to pre-1990s home prices, giving consumers an incentive to eventually buy. 

Still, Fleming believes real estate activity could decline if mortgage rates rise this year.  

"The most likely scenario is moderately higher interest rates that return housing affordability to where it was last year, hardly a draconian impact," Fleming wrote in his update. 

Overall, the real estate market continues to putt along with housing starts falling to an annualized rate of 698,000 in February 2012, down from 702,000 in January. Fleming sees the change as "OK" given the fact starts have been flat since January of 2010.

The good news is the recent upswing in home sales. In February, sales increased 11.5% from a year ago to 280,100 units, CoreLogic said. Over the past 12 months ending in February, 3.9 million homes were sold, slightly above the pace set in calendar year 2011 levels while still below 2010's pace when the market was aided by homebuyer-tax credits.

Fleming said the recovery is now 3 years old, but it's the slowest post-recessionary growth period to-date when compared to post-war expansionary periods. 

kpanchuk@housingwire.com