Whether it was the disappointing quarterly earnings numbers for America's top two home-improvement companies, the dismal listing of October housing starts and new building permits or the downbeat readings for the National Association of Home Builders (NAHB) Sentiment Index, you had to dig pretty deep to find any hint of a near-term rebound in the housing sector.

As investors, we all know that the U.S. housing market will eventually rebound. Consumer interest in housing will be fueled by improving business conditions, renewed jobs growth, a loosening of credit restraints for mortgages and the demands of a growing population for new and better places to live.

The two big questions are: When will that rebound begin – and what's the best way to profit from it?

Reading between the lines of the public and private-sector reports we've seen over the past two weeks, we can reach the following key conclusions:

• Although a full-blown housing recovery isn't in the cards right now, the sector is at least showing signs that it's bumping off the bottom.
• In fact, given the stock market's well-known role as a leading indicator for several sectors, the stock-price advances that we've seen since share prices bottomed in March confirm that a rebound has definitely begun.

Indeed, four specific developments offer a concrete confirmation of our analysis – and point at the investments we should be looking at as the best possible profit plays for the eventual housing-market turnaround.

Let's take a look:

1. Rebounds by the Retailing Giants: Home-improvement leaders Lowe's Companies, Inc. (NYSE: LOW) and The Home Depot Inc. (NYSE: HD) reported third-quarter declines in earnings of 30% and 8.9% on Nov. 16 and 17, respectively, but Home Depot's results were well above analyst expectations and Lowe's executives said the firm's fourth-quarter revenue would exceed prior estimates. Both of the "Big Box" home-improvement retailers also said they were seeing "signs of improvement" in the country's hardest-hit housing markets. The reports prompted senior Piper Jaffray Cos. (NYSE: PJC) retail analyst Mitchell Kaiser to project that "both Lowe's and Home Depot will hit positive same-store sales [comparisons] in the second or third quarter of next year." Both stocks suffered losses of 2% to 3% on the earnings reports, but both finished the month well off their post-report lows, despite a couple of hits taken by the Standard & Poor's 500 Index, including its Dubai-inspired 1.7% decline in the shortened Black Friday session.
2. A Look Behind the Numbers: While the NAHB's Sentiment Index slipped from 18 in October to 17 in November, the organization said the November reading was actually flat because October had been revised down to 17.