Aside from the €10 billion Cyprus bailout, U.S. housing data will be another key factor for the markets this week.

Housing starts rose 0.8% in February to an annual rate of 917,000 homes, the U.S. Commerce Department reported Tuesday. That's a 27.7% increase from the year before.

On Monday, the National Association of Homebuilders said homebuilder confidence for new single-family homes fell in March for the third consecutive month. Existing home sales for February will be released Thursday.

While housing may have shown signs of improvement in recent months, perma-bear Gary Shilling, an economist and president of A. Gary Shilling & Co., a financial consultant firm, is not convinced a recovery is in the making.

"It may have bottomed, but I am not sure it has a strong recovery," he tells The Daily Ticker's Lauren Lyster in the accompanying video. "I think the risks are on the downside."

Related: This Is Housing Bubble 2.0: David Stockman

Rentals are hot these days he says, while mortgage applications for new homes have been flat for the last four years.

Mortgage applications fell a seasonally adjusted 4.7% last week from the prior week, according to data from the Mortgage Bankers Association. Refinancing applications also fell 5% from a week earlier due to positive jobs data that pushed mortgage rates higher.

Related: 2 Million Homeowners No Longer Underwater on Mortgage: Zillow

The other issue affecting the housing recovery is excess inventory, according to Shilling. According to the Census Bureau's latest report, this so-called hidden inventory totaled 3,765,000 units or 2.8% of all housing at the end of last year.

"I think housing is probably going to limp along at best," he argues.

Related: Toll Brothers CEO: ‘Housing Recovery Is the Real Deal This Time’

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