Sector snap: Homebuilders slide on price data

Lennar Corp. paced the decliners, falling 10 percent to $13.12 in morning trading. The Miami builder reported a fiscal second-quarter loss and said it expects the housing market to deteriorate more in 2008.

Pulte Homes, Ryland Homes and Meritage Homes each also fell by more than 6 percent. KB Home, which reports its second-quarter results Friday, fell 4 percent to $18.35. Analysts expect the Los Angeles company to report a loss because of falling prices and slack demand.

A growing supply of unsold new and existing homes on the market, tight mortgage lending and industrywide discounting have driven down sale prices and compressed margins.

More evidence of that effect came Thursday, when the National Association of Realtors reported the median price of an existing home sold in May fell 6.3 percent from a year ago.

Sales of existing homes did tick up last month, but analysts said that was not an indication of any sustained recovery.