15+ toys for homeschoolers to build literacy

In our family, we built early learning up with Rock'n learn and Leapfrog DVDs, educational-therapeutic apps (available on all devices) including ColorsKit series for exceptional learners, wooden alphabet puzzles, many montessori-inspired cards, and self-correcting puzzles. I would still recommend these activity sets listed below for their depth and to help along literacy and handwriting at any age, particularly for the hands-on learning!

Melissa & Doug Alphabet Sound Puzzle
This would be great if your child is comfortable with uppercase letters, the sound puzzle makes the letter sounds when the piece is placed correctly. Also check out this See & Spell wooden puzzle.

Learning Resources Alphabet Soup Sorters
These are cans, roughly the size of real soup cans, so I would probably add my own objects for seasonal or special interest times. Alphabet objects can be found all over online, and on amazon itself under different company and product names.

Learning Journey Match It! 3 Letter Words
These self-correcting puzzles are based on sight words, if you have enough you can introduce them gradually as you move through phonetics. Moving forward there are self-correcting puzzles for picture-to-word, compound words, and more! browsing for Didax puzzles and other Match It! sets will show more variety.

Didax Educational Resources Lowercase Sandpaper Letters
Tactile letters of any kind, especially sandpaper help develop motor coordination and preparation for drawing or tracing forms. If you use duplicates, you can use them for tracing of larger words, and supplement handwriting exercises. Browsing for tactile word cards will bring up Key Education's tactile sight words cards, where a full word is made textured on each card.

Learning Resources Letter Construction Activity Set
They also come in giant magnetic sets, and small foam magnetic sets. Activity cards are in this one, so it builds self-correction skills and each segment is a consistent colour.

Lakeshore Learning's Magnetic Sight-Word Sentence Board
Teaches sentence fragments, introduces punctuation, and uses pictures and words on subject tiles. The board has colour-coded self-correction to match the border of the tiles.

Key Education Big Box of Word Chunks 
word building with elements of self correction. Also check out this set of Easy-to-Read Words, Sentence Building and Silly Sentences

How to Tell a Story by Daniel Nayeri

This book comes with 20 story blocks, as the child reads they can put their twist on how the story Story Cubes, but has a book that acts a guide, and the bright colours, large blocks make it a great place to start for early writers.

Lakeshore Learning's Build-A-Story Flip Book
Lets kids write silly stories and practice paragraph development.