LOS ANGELES (AP) â¿¿ Lennar Corp., which builds homes in 17 states, is expected to report a profit for the third quarter on Monday, as well as annual increases in home orders, reflecting soft sales last summer after homebuyer tax credits expired.

WHAT TO WATCH FOR: How new home orders and closings fared during the June-to-August quarter. Also, how much the builder's Rialto unit, which buys troubled loans and properties from banks, contributed to the company's profit.

In addition, investors will be looking to see whether Lennar CEO Stuart Miller comments on the Labor Department's recently launched probe into the employee pay practices of large U.S. homebuilders.

Despite a lackluster spring home-selling season this year and weakening U.S. home sales, Lennar has reported a profit for five consecutive quarters.

A key factor behind the builder's profitability has been its Rialto unit. In the second quarter, the unit's operating earnings climbed to $9.8 million from $5.1 million.

For the third quarter, analysts estimate, on average, that Lennar's new home orders will post an annual increase of nearly 8 percent, according to FactSet.

Sales of new homes in the U.S. haven't fared much better this year than in 2010, when they fell to their lowest level dating back nearly a half-century.

New home sales declined in each month of the May to July quarter. In July, they fell 1 percent to a seasonally adjusted annual rate of 298,000 â¿¿ less than half the 700,000 that economists say represent a healthy market.

Last year, 323,000 homes were sold â¿¿ the worst year on records that go back to 1963.

High unemployment, larger down-payment requirements and tougher lending standards are preventing many people from buying homes. And some potential buyers who can clear those hurdles are holding off, worried that home prices have yet to bottom out. Builders also are struggling to compete with the large number of foreclosed properties on the market.

WHY IT MATTERS: Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy. Each new home creates an average of three jobs and generates $90,000 in taxes, according to the National Association of Home Builders.

Lennar, which is based in Miami, is the third-largest homebuilder in the U.S., based on homes delivered last year.

WHAT'S EXPECTED: Analysts surveyed by FactSet expect Lennar will report a profit of 11 cents per share on revenue of $794.4 million.

LAST YEAR'S QUARTER: Lennar earned $30 million, or 16 cents per share, on revenue of $825 million.

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