With each passing day, I'm more convinced that one of the biggest problems homebuilders have is because of many business journalists' lousy grasp of the real workings of housing economics. Unfortunately, consumers nationwide -- Fools included -- are bathed in constant misinformation on the market's true status and likely direction.

Take Monday's report from behind the rose-colored-glasses of the National Association of Realtors. It announced that November's existing home sales rose 0.4% from October. That may sound modestly encouraging, but the really meaningful metric was the accompanying 20% drop year over year in the pace of sales.

Beyond that, the median home price allegedly slid by 3.3% in the past year. Frankly, I'd bet any of my children that the real slide was far greater -- or will be, at least, once Realtors and their clients face up to the nation's growing spread of For Sale signs, and begin cutting their asking prices.

But in my opinion, the real reportorial travesty was saved for the final paragraph of a report I read on the newly released existing-home-sales numbers. After genuflecting toward last week's government report, which cited that November new-home sales had declined by 9% -- again, an almost meaningless month-to-month number -- the reporter added:

The new-home numbers are thought to give a more current account of the health of the housing market because they are recorded when a contract is signed. The existing home figures lag behind because they are based on contract closings, many of which reflect deals negotiated months earlier.

Fine. But with Beazer (NYSE: BZH), for instance, experiencing a cancellation rate of about two-thirds of its initial contracts, and with other builders such as Centex (NYSE: CTX), Lennar (NYSE: LEN), Pulte (NYSE: PHM), and Toll Brothers (NYSE: TOL) all watching greater-than-usual numbers of customers walk away from deals, the reporter's contention becomes totally fallacious. Under those circumstances, give me actual closing numbers for a true comparison.

This virtual flood of often incorrect and usually meaningless information just makes a difficult situation worse. It's yet another reason for Fools to stand fast against the siren call of big potential profits in the homebuilding sector.

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Fool contributor David Lee Smith owns nary a share in any of the companies mentioned. He does welcome your questions or comments. The Motley Fool has a no-cancellation disclosure policy.