Fools, forgive me for this one: The nation's ongoing soft housing market continues to take a Toll on the major homebuilders. Last week, luxury builder Toll Brothers (NYSE:TOL) reported lower results for its first quarter of fiscal 2007.

For the quarter, the company earned $54.3 million, or $0.33 per share, compared to $163.9 million, or $0.98 per share, for the same quarter last year. The company's results in its most recent quarter were reduced by pre-tax writedowns of $96.9 million to reflect the reduced value of land positions and housing inventories, along with a $9 million pre-tax goodwill impairment charge related to Toll's 1999 acquisition of Detroit-area builder Silverman Companies. After tax, the writedowns cost the company $0.39 per diluted share in the quarter. A year ago, writedowns in the January quarter totaled $1.1 million, or less than $0.01 per diluted share after tax. Without the writedowns and the impairment charge, the most recent quarter's earnings were $0.72 per diluted share, down 27% from the year-ago period.

Toll's revenues for the quarter were $1.09 billion, down 19% from last year's first-quarter record of $1.34 billion. The quarter-end backlog of homes sold but not yet delivered was $4.15 billion, representing a 30% decline from the $5.95 billion of Jan. 31, 2006. The company signed 1,463 new contracts in its most recent first quarter, down 14% from the 1,695 contracts signed a year earlier. However, allowing for cancellations, net new contracts for the quarter were 33% lower than in last year.

In early December, when he discussed the results of his company's final fiscal 2006 quarter, Toll Brothers CEO Robert Toll seemed optimistic that recovery had already begun in some of the company's markets. Last week, however, he appeared far more reserved, saying: "There are too many soft markets at this stage of the selling season to call a general upturn in the new home market. Demand varies greatly from week to week in individual markets."

When January's nationwide housing starts were released two weeks ago, the 1.643-million-unit pace was a 14.3% decline from December. That's just one data point on the scale of starts, but when it's coupled with the soft earnings performances of the major builders, it makes me wonder exactly when a housing recovery will begin in earnest.

Nonetheless, many analysts following the sector, including Citigroup's longtime homebuilding observer Stephen Kim, believe there's currently value in the builders' shares. I'm inclined to agree, especially since the homebuilding stocks -- which appear to have bottomed out last July -- typically anticipate housing activity by many months. In addition to Toll, which I like for its position in the luxury portion of the sector, I'd urge Fools to look at other well-managed and geographically diversified homebuilders, such as Centex (NYSE:CTX) and Ryland (NYSE:RYL).

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Fool contributor David Lee Smith owns shares in Centex, but not in any of the other companies mentioned. He welcomes your comments or questions. The Fool has a disclosure policy.