KB Home (NYSE:KBH) is living a charmed life. Thanks to a blessed combination of a weaker dollar, soaring stock market, and a positive earnings beat, shares of the homebuilder jumped 5.4% for the day. If we were simply looking at these broader trends, you would assume that housing and the underlying economy has recovered from its deflationary cycle.

The oddity, though, is why insiders are not reading the memo. According to the Yahoo Finance page for KB Home, analysts skew heavily towards the undecided, or “hold” recommendation. In recent months, the trend has gotten worse. Currently, more analysts are either bearish or extremely bearish on KBH stock than the other way around.

How can this be when we are inundated with news that the economy, particularly housing and the labor markets, are on the path to robust recovery? It turns out that the broad data hides disconcerting problems.

Not All Real Estate Markets Are Equal

Economists often refer to the S&P/Case-Shiller U.S. National Home Price Index to gauge the health of the real estate markets. On surface level, everything seems moving in the right direction. Since February 2012 to April of this year, the home price index skyrocketed nearly 41%. Presently, we’re sitting on all-time record levels.

By logical extension, the labor markets must have also recovered to engineer such dramatic housing bullishness. Indeed, companies are hiring and more discouraged workers are back to making an income. But the problem is that the costs for hiring are also on the rise. Between the peak of the housing bubble in 2007 until now, the employment cost index has gone up 21%.

Nor are real estate sectors enjoying a balanced “recovery.” The Phoenix home price index is well under its housing peak, whereas condominium pricing in New York City has shot up 17% from its real estate bubble glory days. In sharp contrast, housing for New York state is down 12% from the peak.

real estate, Phoenix

This is simply a case of the haves and have-nots, and it could bite us badly down the line.

Housing is Not Sustainable

Those that bought real estate amid the aftermath of the 2000s era housing crisis have made one of the shrewdest investments in recent memory. But another opportunity for those that missed that boat could be underway.

Right now, the American worker’s wage averages a little over $26 per hour. That’s about a 25% increase from the salaries enjoyed by workers in the run-up to the housing crisis. However, in many real estate markets, home prices in high-demand regions have shot up 50% to 100% in just the past few years!

Unfortunately, the housing sector is just not sustainable given the underlying dynamics. At the current average wage, a family cannot afford a typical 30-year mortgage, let alone associated expenses and tax liabilities.

Mathematically, this does not look like it will end well, and concerned investors are right to take precautionary measures.