(FORTUNE Magazine) - The long-feared housing slowdown has arrived. But does that mean stocks that thrived on the real estate boom will come crashing down? It isn't looking that way yet. FORTUNE assembled a mini index of eight issues, and we found few signs of irrational exuberance.

Investors seem to have anticipated the end of the craze: As a group, our eight housing stocks have returned only 1% over the past 12 months, vs. 11% for the S&P 500 index. As a result, they are cheaper than the market (average P/E of 14, vs. 17 for the S&P 500), even though they boast superior projected 2006 earnings growth (10% vs. 6%). Maybe that's what has attracted value hawks like Bill Miller (who's bought Centex (Research) and Pulte (Research)) and Warren Buffett (Home Depot (Research)).

Are they onto something? Perhaps. But risks remain. The inventory of homes for sale rose 21% from January 2005 to January 2006, and in California, homebuilder Centex has had to resort to gimmicky one-day sales--"Save $150,000 on a Centex home, 12 hours only!"--to unload inventory. Higher interest rates mean less refi business for Washington Mutual (Research) and Countrywide (Research) and fewer opportunities for homeowners to upgrade. As Lehman Brothers analyst Steven Fockens recently wrote of flooring company Mohawk (Research), "With housing turnover finally softening, we'd expect related spending, including flooring, to follow suit."