Homebuilders on the Housing Market

Several major homebuilders have just reported. Here are a few quotes:

“The operating environment for housing remained very difficult during the first quarter of 2009. The housing market continues to face rising unemployment, tight mortgage availability, increased foreclosure activity and declining home prices, all putting negative pressure on buyer demand."
Richard J. Dugas, Jr., President and CEO of Pulte Homes, Press Release

["M]arket conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of both new and existing homes, increasing unemployment, tight credit for homebuyers and eroding consumer confidence."
Donald R. Horton, Chairman of the Board, D.R. Horton Press Release

"Housing markets remained challenged throughout the quarter, with the positives of historic affordability and low interest rates offset by rising foreclosures and high resale inventories."
Timothy R. Eller, chairman and CEO of Centex, Press Release

Challenging. Difficult. Rising Foreclosures. High inventory levels. Still a very difficult environment for the homebuilders.

The little bit of good news was the cancellation rate improved (after skyrocketing in the 2nd of 2008):

Pulte: The cancellation rate improved to 21% for the first quarter of 2009 compared with 47% for the fourth quarter of 2008 and 28% for the first quarter of 2008.

D.R. Horton: The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the second quarter of fiscal 2009 was 30%.

These cancellation rates are still above normal (Note: "Normal" for Horton is in the 16% to 20% range, so 30% is still high.), but these are the lowest cancellation rates since early 2006.