Buffett's Berkshire Is True Test of Housing Recovery

To underscore the point, the National Association of Home Builders reported that single and multi-family housing starts peaked at over 2 million units in 2005.

Buffett is certainly positioned for any durable rebound. It's that positioning and moderated optimism, which may best-serve do-it-yourself stock investors and Buffett acolytes. Linking the housing recovery to the economy also plays into another major ballast of Berkshire Hathaway performance, the company's stock portfolio focus on the U.S. banks.

For instance, top Berkshire bank investments like Wells Fargo (WFC) , U.S. Bancorp (USB) , BB&T (BBT) and M&T Bank(MTB) reported earnings that augur well for the housing market.

Buffett's biggest bank holdings have performed strongly after a second quarter mortgage lending rebound.

Recently BusinessWeek detailed reasons to be skeptical of a full-fledged housing rebound, citing variable regional home price performance in the S&P Case Schiller home price indexes, which show that while areas like Phoenix are rising, other parts of the country hit by the bust like Atlanta continue to test new lows.

In the first half of 2012, the Case Schiller national index also hit new lows, underscoring how expectations of a V-shape recovery have been misguided. Other causes of concern are still historically high home inventories and current interest rates, which may not be sustainable.

Investors who are still uncertain whether homebuilders, banks and the wider U.S. economy is poised for a housing-recovery based tailwind may be well served parsing through Berkshire Hathaway's earnings, due later on Friday. If, when added up, Berkshire businesses like Clayton Homes, Benjamin Moore and Borsheims, among others, show earnings that rise materially, it may serve as a stronger confirmation of a housing recovery.

In second quarter earnings, Berkshire Hathaway is expected to earn $1,777 in earnings per share on revenue of $36.8 billion.

For more on Berkshire investments, see why Warren Buffet shuns investment banks.

-- Written by Antoine Gara in New York