US Housing still tanking

The Commerce Department reported a 6.6% drop in new home sales in June to a seasonally adjusted annual rate of 834,000, below analysts expectations of 890,000. Sales are down 22.3% compared with June 2006.

Sales in May were revised to a 893,000 annual pace instead of the 915,000 previously reported.

Inventories of unsold homes were unchanged at 537,000. At that pace inventory represents a 7.8-month supply at the June sales pace, up from 7.4 months in May.

The median sales price was $237,900, down 2.2% compared with June 2006.

Some quotes after today's numbers.

"Home building, sales and prices have not hit the ground floor" Stu Hoffman, chief economist for PNC.

"The industry forgot to pack a parachute, and the ground is coming up fast" said Joel Naroff, president of Naroff Economic Advisers.

"2009 is shaping up as an OK year." Richard Moody, chief economist for Mission Residential,

Economist Mark Zandi of Moody's Economy.com said it'll be 2010 before the market turns around.

Notice there is no more talk of being near a bottom in housing. The consensus view is coming around to the reality that there is still a lot of pain to go in the US housing market.


Homebuilders Earnings

Some truly horrible earnings reports from homebuilders

D.R. Horton Inc. (DHI)reported a huge loss of $823.8 million, compared to a profit of $292.8 million, in the year-ago quarter.

The company cited pretax charges of $835.8 million for inventory impairments and $16.2 million related to write-offs on land options it's abandoning. The company also took a pretax goodwill-impairment charge of $425.6 million.

Also Beazer Homes USA Inc. (BZH) reported a quarterly net loss of $123 million, compared with profit of $102.6 million, a year earlier.

Beazer booked pretax charges of $188.5 million related to inventory impairments, abandonment of land options and goodwill impairments. The company said total revenue dropped to $761 million from $1.2 billion a year earlier.

In case you missed them here are some other recent results from US builder's:

Centex Corp. (CTX) posted a quarterly loss from continuing operations of $131.3 million.

Ryland Group Inc. (RYL) reported a $52.4 million, loss on 38.2% lower revenue.

M.D.C. Holdings Inc. (MDC) printed a loss of $106.1 million as revenue dropped 42%.

Meritage Homes Corp. (MTH) recorded a loss of $56.6 million as revenue fell 38%.

Truly ugly stuff. As a sign of things to come Wells Fargo & Co. (WFC) Home Mortgage division announced that they will close their nonprime wholesale lending business, which processes and funds subprime loans for third-party mortgage brokers.

Strap yourselves in folks, we're just getting started.