Shares Of Homebuilders Fall On Negative Reports

NEW YORK (AP) — Shares of homebuilders traded down Thursday after a pair of fresh reports indicated the housing industry's recovery will likely be slow and gradual.

Shares of KB home fell $1.31, or 9 percent, to $13.91, while shares of Hovnanian Enterprises Inc. shed 22 cents to $2.65. Pulte Homes Inc. stock fell 9 cents to $8.48, and Centex Corp.'s stock fell 87 cents to $8.08.

The Commerce Department said new U.S. home sales were almost flat last month. The 0.3 rise in sales in April — to a seasonally adjusted annual rate of 352,000 — came from a downwardly revised rate of 351,000 in March.

At the end of April, the government said there were 297,000 new homes for sale. It would take more than 10 months to exhaust that supply at the current sluggish sales pace.

Foreclosures, meanwhile, continue to present strong competition.

The Mortgage Bankers Association also issued a report Thursday stating a record 12 percent of homeowners with a mortgage are now behind on payments or in foreclosure.

The foreclosure rate on prime fixed-rate loans has doubled in the last year, indicating the housing crisis is spreading to borrowers with good credit.

Shares of DR Horton Inc. fell 61 cents to $8.61, and Lennar Corp.'s stock fell 69 cents to $8.68. Standard Pacific Corp. stock fell 6 cents to $2.42, and shares of Toll Brothers Inc. slipped 24 cents to $20.49.