Other metrics in housing may be showing worrying signs of a slowdown, but one thing is evident and that’s housing demand is continuing to strengthen.

That’s a mixed bag.

Granted, people may not have the incomes to keep pace with the outsized (though slowing) pace of home price growth. And credit restrictions are either too tight or too loose, depending on which assumptions you start with.

But demand is strong, and that’s a critical component of the whole supply, demand and price thing that often gets put on the backburner.

Let’s break it down. Total home sales increased to nearly 6 million annualized in June. This was the fastest pace of sales since before the financial crisis and is a clear sign that the housing market is gradually normalizing.

The dark cloud to that silver lining is that the decline in pending sales suggests that existing sales, which make up around 90% of the market, may drop back in the coming months.

The National Association of Realtors’ pending sales index went into a skid in June, falling 1.8% — expectations were for a 0.9% gain — the biggest drop since December 2013. The pace of the drop was what alarms analysts.

Balanced against the recent surge of pending sales pushed existing home sales above long-run average levels, so this may be a trifling in the big picture.

But taken in the long-run, and you have to do that in housing — any slowdown in existing sales will be set against much stronger growth in new home sales.

That’s how it’s been playing out, anyhow.

One big variable is the issue of a pending Federal Reserve interest rate hike. Affordability is still there even with a rate hike, but there’s the problem that the recovery in mortgage lending has stalled.

The latest housing affordability reading for May showed the index dropping back to the low end of the post-crisis range, due primarily to the steady rise in home prices. Further declines in affordability seem likely in June and July, as home prices rose further and mortgage rates moved higher.

In the area of price, the CoreLogic index appears to be falling back into line with other measures, which point to annual price growth of roughly 5%. 

That’s still not low enough to accommodate the lousy level of job and wage growth that the economy has eked out under the current administration and the hobbling effects of Dodd-Frank, but it does cool concerns that prices were ridiculously out of whack with income. (Now they’re just badly out of whack.)

If you can believe the last two quarters’ GDP — and I can give you a dozen reasons to have doubts (cough, cooking the books) there was modest growth so far in 2015, but tepid is too kind a word. Especially when you look at the quality and types of jobs employers were able to add — part-time, low-wage jobs, with record-low workforce participation.

The 30-year fixed mortgage interest rates increased to 4.22% on average in July, although the recent slide in Treasury yields suggests that they could drop back towards 4%. And with the Fed on track to begin raising rates in September (at least in most people’s minds) any decline won’t last much longer.

The question becomes can this sickly economy and housing recovery survive without the life-support of artificially low interest rates?

That’s the trillion-dollar question, which, considering the level of debt and deficit, is an even more expensive proposition.

“We continue to believe that housing demand would roll over fairly quickly if mortgage rates move higher, which makes us believe that long term interest rates will remain anchored near current levels,” says Chris Flanagan at Bank of America/Merrill Lynch.

Bringing it down to the housing level, I’m skeptical. Purchase mortgage apps dropped by 1.9% in July from June and the recent upturn in mortgage activity has stalled out.

Inventories are rising — there were something like 2.4 million homes for sale in June, up from around 2.2 million in January as a rolling average. The balance of demand and supply has tightened, and the months’ supply of unsold homes dropped to a two-year low in June. This could constrain home sales and put unwarranted, unhelpful upwards pressure on prices.

This recent tightening in supply conditions could, some say, push price growth to 10% or more in some markets.

Good on paper for buyers, but what good is it — if it’s unaffordable?