Lennar Corp., the second-largest U.S. home builder, posted a quarterly loss on Tuesday, forecast a loss in the current quarter and warned that the housing market could deteriorate further.

As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions, Stuart Miller, chief executive, said in a statement.

Given uncertain market conditions, we continue to lack visibility as to future results, but we currently expect to be in a loss position in our third quarter, he said.

Lennar recorded a net loss of $244.2 million, or $1.55 a share, for its fiscal second quarter, ended May 30, compared with a profit of $324.7 million, or $2 a share, a year earlier.

The results included charges of $329 million, or $1.33 per share, for a loss of land sales, which included a write-down of land values and write-offs of deposits on land options.

Before charges, the company lost 23 cents per share, while analysts expected a profit of 1 cent per share, according to Reuters Estimates.

Wall Street expects the company to earn 20 cents per share before items in the current quarter.

The U.S. housing market has been suffering from a steep downturn for more than a year as high prices and climbing interest rates have deterred prospective buyers. Speculators also have retreated from the market, unloading homes bought as short-term investments.

The industry is grappling with a downturn in demand and a glut of supply. Home builders have responded, cutting prices, adding freebies and shrinking their businesses to wait out the downturn. Lennar said incentives to invigorate sales ate into quarterly gross margins, which fell to 13.6 percent from 23.7 percent in 2006.

Lennar's home-sale revenue fell 33 percent to $2.7 billion, as the number of homes declined 29 percent. Signed prospective buyers canceled their orders at a rate of 29 percent.

The average selling price of a Lennar home dropped 7 percent to $298,000.

New orders during the quarter fell 31 percent to 8,056 homes, excluding unconsolidated businesses.

Shares of Lennar on Monday closed at $38.75 on the New York Stock Exchange. Year-to-date, Lennar shares are down 26 percent, while the sector is off 24 percent, according to the Dow Jones U.S. Home Construction Index.

According to BuilderOnline, Lennar overtook Pulte Homes Inc. as the No. 2 U.S. home builder, as measured by the number of homes sold last year, behind D.R. Horton Inc.