National Association of Realtors

Houses are cheap. Interest rates are low. And the economy is improving. Even Warren Buffett says that housing might be the best investment today. So should you run out and buy a home? Not necessarily.

Most homebuilders saw their shares pop higher Tuesday after heavyweight Lennar released better-than-expected quarterly numbers -- but not KB Home. In fact, its shares actually fell. Here's why KB isn't invited to the housing recovery party.

The National Association of Realtors reported this week that sales of existing homes rose 4.3% in January, their third rise in four months. But there are other housing trends to consider that are much more telling than a modest uptick in sales.

Some recent reports on the real estate market show home prices starting to stabilize in many areas. Other data suggests the housing market has further to fall. But whichever direction the numbers are heading, there are few tenets that smart buyers and sellers should always follow.

Housing remains in a slow, but uncertain recovery, as existing-home sales increased a less-than-expected 5.6% last month, to a 4.68-million-unit annual rate. At least, home sales rose in every U.S. region, and inventories fell.

Sales agreements for previously occupied homes rose 10.4 % in October. But that one spark of hope comes against a backdrop of declining prices, bulging inventories and ongoing legal issues around foreclosures. Don't count on a real estate recovery next year.

Aided by an improving job market and comparatively low mortgage rates, U.S. pending home sales surged a record 10.4% in October. Still, the latest new- and existing-home sales reports suggest a sluggish housing recovery at least into early 2011.

Sales of existing homes were hit with their first monthly decline since July as October sales fell 2.2% to a seasonally adjusted 4.43 million-unit annual rate. However, the drop isn't too surprising, given the usual seasonal cooling of home sales in the fall.

Pending home sales in the U.S. unexpectedly fell 1.8% in September, the National Association of Realtors reported Friday. It was the statistic's first decline in three months, and one that suggests that the housing sector's recovery is likely to remain uneven through at least early 2011.

What should investors make of August's better-than-expected 7.6% rise? Not too much. Even though it's a big improvement over July's ugly 27.2% plunge, it's still the second-lowest month for existing-home sales in the past 15 years.