DALLAS — The spring home-selling season was a bust for D.R. Horton Inc., the biggest home builder in California.
Horton said Tuesday that it would post a loss from operations for its latest quarter after net orders fell 40% and it wrote down the value of unsold houses.
The report provides more evidence that the housing sector continues to sink. Inventories of unsold used homes are at their highest level in 15 years. In part, experts blame tougher rules on qualifying for mortgages. They also say the slowdown makes sense after several years of strong sales.
"It's going to be another year and a half before we see stability or growth," said Leslie Appleton-Young, chief economist of the California Assn. of Realtors. "We certainly haven't bottomed out."
Horton shares fell 39 cents, or 2%, to $19.40 on Tuesday after sinking to a 52-week low of $19.16 earlier in the session.
The Fort Worth-based builder said it took orders for 8,559 houses worth $2 billion in the three months that ended June 30, down from 14,316 homes worth $3.8 billion a year earlier. The decline was sharpest in California and less severe in the Southeast. The rate of canceled orders was 38%.
Horton, which plans to report results for its fiscal third quarter July 26, said it expected a loss from operations as a result of "significant" write-downs of unsold houses to reflect the falling value of homes on the market.
A glut of unsold homes has pushed prices lower, and Horton said it had adjusted prices to cope with the deteriorating market. Builders have also been throwing in extras to entice buyers. But neither freebies nor lower prices have brought in enough traffic, particularly for entry-level homes, where the pool of buyers is being reduced by tougher mortgage underwriting standards.