NEW YORK ( TheStreet) -- M/I Homes ( MHO), Standard Pacific Group ( SPF), Beazer Homes ( BZH), Lennar Corporation ( LEN), Armstrong World Industries ( AWI), D.R. Horton ( DHI), Owens Corning ( OC) and Ryland Group ( RYL) are housing stocks with 82% upside, based on average 12-month price targets.

According to real estate portal Zillow, home values in the U.S. fell 3% sequentially during the March quarter and 1.1% month-on-month. The slackening demand results from the profusion of foreclosures. Besides, the March quarterly numbers of companies in the home building and products sector have been dismal. Masco Corporation ( MAS), USG ( USG), NVR ( NVR) and Meritage Homes Corporation ( MTH) reported results below analysts' consensus expectations.

Consumer spending has improved as sales at U.S. retailers climbed in April 2011. According to a Bloomberg survey, April could see a projected growth of 0.6% in purchases, following an increase of 0.4% in March. Employment data, as payrolls increased consecutively in the last few months, and April's better-than-expected 244,000 jobs could buoy the housing sector by late 2011. Besides, housing affordability remains near record highs and favorable interest rates are other positives.

We have identified eight housing stocks that hold potential to deliver attractive returns over the next one year. Analysts' consensus estimate indicates an average return of 34% for the portfolio and the potential to deliver up to 82% upside over the next one year. These stocks received analysts' buy ratings of 49%.

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