This is going to be one of those weeks.

Starting with the release of April existing home sales tomorrow morning (April 24) and new home sales on Wednesday, the week will include first-quarter earnings reports from Centex, Pulte, Ryland, Meritage and Standard Pacific and conference calls from all those plus Beazer, M/I Homes and several suppliers to the building industry.

There also will be fresh data on consumer confidence, first-quarter GDP and durable orders.

So far, D.R. Horton (profit down 85%) and NVR (down 36%) have reported disappointing fiscal first-quarter earnings, although NVR's numbers were seen as a positive by Wall Street as they reflected the company's wise use of options on land. Pulte put out preliminary numbers that indicate a loss for the quarter.

In a research note put out on Friday (April 20), Ivy Zelman, the lead home building analyst and here team at Credit Suisse, wrote that in the month between mid-March and April 13, "homebuilder stocks declined 6% versus the Standard and Poor's [index] gain of 4% on the back of mortgage liquidity concerns, indications that the spring selling season has been a bust and the announcement of a federal investigation into BZH's prior lending practices. SPF (down 13%), HOV (down 12%), KBH and BZH (down 11% each) underperformed during this time period, as investors expressed liquidity concerns related to companies with above average leverage."

Investors are apparently expecting more bad news. Credit Suisse reports that short sellers are gathering around the home building sector. According to Credit Suisse, "the median homebuilders' short interest increased 12% from last month to 17.4% from 15.6%, the third consecutive increase after falling from a near-term peak in September. April's level represents the highest of the last 12 years." Among the individual stocks, Beazer had the highest short interest (37%), followed by WCI (35.5%), K. Hovnanian (25.8%) and Ryland (25.1%). Lowest were D.R. Horton (8.0%) and Pulte (9.1%). The largest increases for the month came at Beazer (up 69%) and KB Homes (up 41%).