More bad news on the home building front

It was pretty sad to see some folks get excited over Lennar's quarterly figures yesterday, because they lost "only" $88,200,000.00.

Prognosticators on Wall Street had projected a much bigger loss of $168,525,000.00.

So, the story they took away from the homebuilder's reports was, "It's bad, but not as bad as we thought it was."

I beg to differ.

The lower-than-expected loss is more likely attributable to lack of interest in builders' "fire sales." They have slashed asking prices, willing to take the big losses that Wall Street was prepared to see in an effort to reduce inventory.

But, there are no takers.

In Lennar's case, sales dropped 57% with a whopping cancellation rate of 26%. So, hardly anybody is buying. And, those that are, either cannot find financing or have second thoughts and are backing out.

But, don't look at Lennar's numbers as the sole barometer of things. Check out the Commerce Department's dire report yesterday that new home sales have dropped to the lowest point in 13 years. And, of more concern, permit applications have dropped to the lowest point in 16 years, an indicator of an even worse set of numbers to come.