LOS ANGELES (AP) â¿¿ Lennar Corp. rendered its verdict on the spring home-selling season on Thursday, saying an expected sales rally in what is traditionally the peak period for home sales simply didn't happen.
The homebuilder's fiscal second-quarter home deliveries fell 8 percent from a year ago, while new home orders were flat. Its profit fell 65 percent against prior-year results that were buoyed by a big tax benefit.
The sales declines were not as bad as Wall Street had anticipated and less severe than what several other large builders have reported of late, but do little to counter the fact that housing has gotten off to a disappointing track this year.
On Thursday, the Commerce Department reported that sales of new homes in the U.S. fell 2.1 percent in May to a seasonally adjusted annual rate of 319,000 homes â¿¿ well below the 700,000 homes a year that economists say must be sold to sustain a healthy housing market.
The National Association of Home Builders, the industry's trade association, now projects sales of new homes will be down this year versus 2010, when sales sank to the lowest level on records going back nearly 50 years.
Still, Lennar CEO Stuart Miller said that while the spring home-selling season "simply did not materialize, it is beginning to feel like the worst days of the housing market are getting behind us."
The executive noted that customer traffic has continued to improve and that, in almost all of its divisions, there are strong pockets of activity.
Even so, Miller cautioned that a housing recovery isn't around the corner.
"Make no mistake, stabilization and recovery will continue to be a slow and rocky process as traffic and desire have not yet translated into strong actual sales," Miller said. "These are, though, the first signs that repair of the market is upon us."