The past week has not been pretty for the housing market as data showed a sharp deceleration, calling the recovery into question.

Among the lowlights:

• Housing Starts fell 16% in January, the biggest monthly drop since February 2011

• Existing Home Sales slid 5.1% last month to the slowest pace since July 2012

• Mortgage Applications hit their lowest level since September 2011

In addition, permits fell more than expected and The NAHB home builder index fell 10 points. Beyond the weather, the housing market is battling the “ongoing headwinds of tight credit, limited inventory, higher prices and higher mortgage interest rates,” according to the National Association of Realtors -- an organization not typically known for being cautious on housing. (Update: The December S&P Case-Shiller 20-City Index, released after the accompanying video was taped, rose a higher-than-expected 13.4% vs. a year ago. But the index rose just 0.8% vs. the prior month, the third-straight month of deceleration.)

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Housing bull and PIMCO deputy CIO Mark Kiesel is undaunted by the recent weakness, arguing the trends are "still very positive for housing" for 2014 -- and beyond.

Specifically, Kiesel cites "good news" in the labor market -- approximately 2.3 million private sector jobs per year -- and "very good news" on consumer balance sheets; specifically, he notes household net worth has rise $14 trillion in the past two years while home equity has risen by $3.5 trillion. Furthermore, he notes only 13% of U.S. homeowners with a mortgage are under water, down from 22% last year and 33% at the market's nadir.

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But the "best indicator" for housing is inventories, which Kiesel says are currently at a 13-year low and a 30-year low as a percentage of the working age population. "There is simply not enough supply where you and I want to buy and because of that we should continue to see a supportive market going forward," he says. "As long as interest rates stay roughly where they are, you should see a continued recovery in this [housing] market."

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Kiesel, who is forecasting 5% price appreciation in 2014, is bullish on homebuilders -- notably Toll Brothers, DR Horton and KB Homes -- and even more bullish on building materials companies such as USG, Masco and Weyerhauser. "Not only are you going to see more homes being built," he says, but the aforementioned stats on consumers' rising net worth and increased home equity means homeowners are going to have more incentive -- and the means -- to remodel.

Aaron Task is the host of The Daily Ticker and Editor-in-Chief of Yahoo Finance. You can follow him on Twitter at @aarontask or email him at [email protected].