Shares of Hovnanian Enterprises Inc. of Red Bank, N.J., the state's biggest home builder, tumbled Friday after the company reported its fourth consecutive quarterly loss and said 35% of home orders were canceled.
Hovnanian reported a fiscal third-quarter loss after the close of regular U.S. markets Thursday. During the quarter, which ended July 31, buyers canceled orders and the company wrote off options to buy land.
Ara Hovnanian, the chief executive, said in a press release that turmoil in the mortgage market has increased since the end of its quarterly reporting period and weak consumer confidence hurt results.
Builders are struggling to sell homes as potential buyers back out of sales agreements, wait for prices to decline further, or find mortgages difficult to secure.
"The tightening of lending standards in the mortgage market has extended beyond the subprime market and is now impacting jumbo mortgages and further tightening of alt-A loan underwriting standards," Mr. Hovnanian said.
"This is leading to a further reduction in the universe of qualified buyers for our homes."
Shares of Hovnanian ended the session 7.12% lower than Thursday's closing price.
The net loss for the fiscal third quarter was $77.9 million, or $1.27 a share.
That compared with net income of $77 million, or $1.15, a year earlier.
