Mortgage Lenders & Homebuilders
Shares of mortgage lenders plummeted Thursday along with the broader market amid mounting evidence of serious atrophy in the housing industry.
The home lending market has been struggling for most of 2007 as sagging home prices choke borrowers’ ability to repay mortgage debt. This week, further proof that the housing market is nowhere near recovery has dragged the mortgage industry even further.
The National Association of Realtors reported sales of existing homes fell 6.6 percent last month, while the Commerce Department said new home sales slipped 3.8 percent. At least eight months worth of unsold homes sit on the market, the Commerce Department said.
A slew of bad news from homebuilders compounded the bleak assessment of the housing market. Five builders - Beazer Homes USA Inc., D.R. Horton Inc., Pulte Homes, Ryland Group Inc. and M.D.C. Holdings Inc. - collectively lost more than $1.6 billion in the second quarter.
Each homebuilder said sales fell at least 29 percent. At two of them, sales fell at least 40 percent.
Another homebuilder, WCI Communities Inc., said it tried and failed to sell itself because “uncertainty in the homebuilding and debt markets have made the sale process more challenging.”