It seems to me that there are a few key barometers of the fortunes of the nation's big builders. One is the activity and earnings picture at luxury builder Toll Brothers (NYSE: TOL), because I believe that a housing recovery will emerge first at the high end and then trickle down to the markets serving first-time buyers and first move-ups.

But beyond that, I'm paying close attention to California-based KB Home (NYSE: KBH). KB Home builds to order, and thereby is generally immune from most of the house inventory writedowns that have hit many of its peers that routinely toss up speculative homes. That, of course, doesn't mean the company has immunity to land and option write-offs.

I therefore took special note on Friday when KB Home reported its results for the quarter ended in February. The company recorded a loss of $268.2 million, or $3.47 per share, compared with income of $27.6 million, or $0.36 a share, last year. Revenue slipped 43% to $794.2 million. But even more key to the company's results was the $223.9 million non-cash charges in the quarter.

During the call, CEO Jeffrey Mezger said that, given declining consumer confidence and high home inventory levels, he doesn't expect a meaningful improvement in the circumstances surrounding his business in the near term. Last week, the Conference Board reported a sizable drop in the all-important level of consumer confidence for March.

KB Home's report followed by a day a similar release from Florida-based Lennar (NYSE: LEN), which also moved from profitability in the year-earlier quarter to a loss in the most recent quarter.

So the news remains generally bleak for housing and homebuilding. But as I showed in the latest "The Housing Roundup," most builders' share prices have begun to rise this year. On that basis, I urge Fools with an itch to invest in the builders mentioned above, or perhaps in the likes of Ryland (NYSE: RYL), Pulte (NYSE: PHM), or Meritage (NYSE: MTH), to do so only after calling upon a heavy dose of patience and careful analysis.

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