Admittedly, it's now possible to find a few very faint signs of life in the housing industry -- something like the first premature buds in February.

But let me caution Fools against early euphoria: Homebuilding's winter almost certainly has a long way to go.

However, what we're trying to accomplish here is to compile most of the factors that play on homebuilding strength -- or weakness -- rather than allow you to be subjected to the barrage of confusing building news that's tossed your way by all manner of record keepers -- from the feds to the Realtors' association and on to the homebuilders' group -- on an almost daily basis. That way, you can get a quick fix on the major trends that seem to be propelling or retarding the turnaround.

Last time we put together such a compilation, most of the trends were down. And while we're still not beyond the April showers, the Pulte (NYSE:PHM)-Centex (NYSE:CTX) deal seems to have added some life to the group.

Going up
However, before trying to decide whether housing is improving or still descending, let's quickly mention some factors that appear to be headed in either direction. For instance, last week the National Association of Home Builders announced that, for the first time in six months, builders' sentiment had climbed from single-digit territory to 14. That may not seem like a bottle-rocket explosion, since 50 is a neutral rating, but it constituted the largest one-month climb in nearly six years and indicated that the guys on the front lines just might be feeling better about life.

Other causes for optimism included a (probably temporary) decline in the weekly unemployment report, a rise in pending home sales, and an upturn in new home sales in the South and West. Keep in mind that pending home sales that don't ultimately close aren't erased from the initial metrics.

And headed down
On the down side, home prices are continuing to slide and starts are still falling. And worst of all from the standpoint of the still-inflated inventory of homes for sale, foreclosure activity in the first quarter hit another record. According to RealtyTrac, which keeps close tabs on foreclosure stats, more than 800,000 properties were "blessed" with foreclosure notices in the quarter. Indeed, the March numbers were 12% higher than the next-highest month since foreclosure records were first recorded.

As in the past, we'll list what we believe to be the major factors affecting housing activity, give you the latest news on each, and then rate that bit of news with a plus or a minus. Something tells me we'll edge above the 12-2 score we achieved the last time.

 

Latest Trend

Direction

Home Prices

S&P/Case-Shiller 20-city index down 19% YOY

--

Foreclosures

800,000+ notices in the first quarter

--

Housing Starts

Multifamily weakness pushed total down to 510,000

-

Consumer Confidence

About flat in March after big February drop to 25.3

-

Existing Home Sales

Down 10.3% YOY in February

-

Mortgage Apps.

Down 11% from the prior week

-

Builders' Sentiment

Up 5 to 14 -- Largest jump in nearly six years

++

Unemployment Ins.

Down 53,000 to 663,000 in prior week

+

Pending Home Sales

February indicator rose 2.1%

+

New Home Sales

First gain in seven months; up 4.7% in February

+

You'll notice that some of the directional signals have two symbols. That's because, in my little mind, not all metrics were created equal. Some just mean more than others. So those that seem more important receive two symbols. All in all, the negative still lead 8-5. So we handily topped the last indicator, but the housing world remains far from rosy.

Now let's take a quick gander at how a random group of homebuilders has fared, both since the beginning of last year and thus far in 2009:

 

12/07

12/08

4/21/09

Beazer (NYSE:BZH)

$7.43

$1.58

$1.66

D. J. Horton (NYSE:DHI)

$12.76

$7.04

$11.88

Lennar (NYSE:LEN)

$17.20

$8.63

$8.02

Meritage (NYSE:MTH)

$14.57

$12.17

$16.11

Toll Bros. (NYSE:TOL)

$20.06

$21.43

$19.70

Buy, sell, or hold?
So with all this information, should we buy, hold, or punt the homebuilders? There clearly appear to be enough rays of spring in building -- the market almost always precedes the group's tangible results by six months or so -- that a careful study of the individual builders should be worth your time.

I continue to like Toll because -- unlike some of my peers -- I'm convinced that the recovery will at least include the high end. And then there's Meritage, whose strong concentration in Texas should benefit it over time. Those are two starting points. I'm certain my Foolish friends can dig out others that will add shekels to their portfolios.

For related Foolishness:

Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned above. He does, however, welcome your questions or comments. Meritage Homes is a Motley Fool Stock Advisor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Fool has a well constructed disclosure policy.