Existing-Home Sales, Lennar Hit Builders

Updated from 9:56 a.m. EDT

Lennar (LEN Quote) reported a second-quarter loss Thursday that was wider than expected, and the company said the homebuilding industry is likely to deteriorate further this year unless the U.S. government intervenes to help stimulate consumer demand for homes.

The homebuilder's quarterly loss totaled $121 million, or 76 cents a share, wider than the 55 cent per-share loss that analysts expected, according to Thomson Reuters. A year ago, Lennar reported a loss of $244 million, or $1.55 a share.

Lennar's revenue plunged 61% to $1.1 billion, a number that's slightly higher than Wall Street expected.

Also on Thursday, the National Association of Realtors said existing-home sales rose 2% in May (from April) to an annualized rate of 4.99 million units, but down 15.9% from a year earlier. The results were near economists' expectations. The median price of homes sold fell 6.3% from last year. The supply of inventory totaled 10.8 months at the end of May, down from 11.2 months in April.

In morning trading Thursday, Lennar shares were falling 98 cents, or 6.7%, to $13.59. Other builders were weak on the reports. Ryland (RYL Quote) and Pulte (PHM Quote) were each down more than 5%, while Toll Brothers (TOL Quote) fell 2.5%.

Lennar and other major homebuilders continue to have trouble managing costs at a time when their revenue bases are sharply deteriorating. Ongoing home price drops remain a huge impediment to the industry's return to profitability. Lennar's average selling price on closed homes fell 8% from a year ago.