Glum news from builder

LOS ANGELES – Homebuilder D.R. Horton Inc. on Friday projected weaker sales in fiscal 2011 and said it doesn’t anticipate a significant bump in sales next spring, traditionally the peak season for home sales.

The dour forecast reflects industry concern that a housing recovery now hinges less on affordability and interest rates than on the course of the U.S. economy and prospects for job growth.

“It’s hard to sell a home to an unemployed person,” said Donald Tomnitz, D.R. Horton’s president and chief executive.

Like other builders, Fort Worth, Texas-based Horton said the housing market became even more challenging after federal tax credits for homebuyers expired in April.

Absent the government incentives – and despite mortgage rates remaining at near-historic lows – many homebuyers are opting to stay on the sidelines, put off by high unemployment, tight credit and uncertainty about home prices.

Of late, demand has slowed in line with traditional seasonal weakness in the fall, the builder said.

“Based on current sales demand and the fact that the tax credits were supporting sales demand last year, we expect sales in the next two quarters to be lower than last year,” Tomnitz said.

The expiration of the tax credit has weighed heavily on Horton, as first-time homebuyers account for more than half of its business.

Home sales were the worst in decades this summer. In the midst of that decline in demand, large homebuilders have reported sharp annual declines in new home orders for the July-September quarter.

Among other homebuilders, PulteGroup Inc. recently reported its new home orders slid 12 percent from a year ago and roughly 15 percent since the second quarter. Builder Meritage Homes Corp. said orders were down 36 percent from a year ago, while Ryland Group Inc. reported orders were down 37 percent.