Hovnanian (NYSE: HOV) reported quarterly earnings late Tuesday, painting a dismal outlook for homebuilder shares and exchange traded funds.

The builder lost 69 cents per share, more than analysts were expecting. Wall Street was anticipating a 51 cent loss per share.

A 17% drop in new home orders was the backdrop to Hovnanian’s deliveries sinking 19% after Tuesday’s closing bell. Alex Veiga for Forbes reports that Ara Hovnanian, the builder’s chief executive, wrote the Spring selling season off as a dud, however, net contracts for new homes were up 28% in May from the previous year.

“In a typical bubble, the last stage is when market participants reach a state of despair. We think that seems a fairly good description of current views on housing. Foreclosures and home prices are the most common topics of despair; however, we find typical concerns to be overstated. The foreclosure pipeline has been shrinking for over a year, and now even later pipeline stages are falling,” says a Deutsche Bank analyst on the housing market.

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