NEW YORK (AP) â¿¿ Shares of homebuilders slid Wednesday after data showed home loan applications fell to the lowest level in 14 years. Goldman Sachs analysts downgraded the entire sector, saying the recovery in housing is slowing. Analysts led by Joshua Pollard cut their rating on homebuilders to "Neutral" from "Attractive" because "a looming slowdown in U.S. growth and correspondingly sluggish home sales (are) not a backdrop for outperformance." Pollard said stocks of homebuilders will be pressured until fears of a "double-dip" recession ease. He cut stock price targets by 35 percent and earnings per estimates by 32 percent on a group of homebuilders. The data on housing is getting worse as unemployment remains high and consumer confidence weak. On Wednesday, the Mortgage Bankers Association said its index tracking applications for home purchase loans fell to the lowest level since December 1996, even though mortgage rates are at their lowest in nearly 40 years. The number of buyers who signed contracts to purchase homes tumbled 30 percent in May from April to the lowest point since 2001, said the National Association of Realtors earlier this month. New home sales in May dropped 33 percent to the slowest pace in the 47 years that records have been kept, according to the Commerce Department. Home prices rose during April, the first month-over-month increase in seven months, according to the most recent S&P/Case-Shiller index. However, the rebound isn't expected to last because a government tax credit for homebuyers has expired. Prices have risen 3.8 percent from their April 2009 bottom, but still remain 30 percent below their July 2006 peak. Lennar Corp. led the homebuilder stock drop in midday trading Wednesday. The builder's shares fell 62 cents, or 4.1 percent, to $14.62. PulteGroup Inc. dropped 30 cents, or 3.4 percent, to $8.50; Meritage Homes Corp. fell 69 cents, or 4 percent, to $16.74; and KB Home fell 24 cents, or 2.1 percent, to $11.27.
Other decliners:â¿¿ D.R. Horton dropped 19 cents to $10.23. â¿¿ Toll Brothers Inc. fell 33 cents to $17.23. â¿¿ NVR Inc. slid $12.74 to $664.64. â¿¿ Ryland Group Inc. dipped 26 cents to $17.28. â¿¿ Standard Pacific Corp. shed 7 cents to $3.73. â¿¿ Beazer Homes USA Inc. fell 7 cents to $3.64. â¿¿ Hovnanian Enterprises Inc. slipped a penny to $4.25. â¿¿ M/I Homes Inc. ticked up a penny to $10.42.