Homebuilder Hovnanian Enterprises on Tuesday reported a second-quarter loss more than 10 times wider than its loss in the year-ago period.
Chief Executive Ara Hovnanian offered his industry outlook to CNBC.
The company cited fears of tightening credit as well as a moribund U.S. economy as drags on housing sales. But the homebuilder said it had enough liquidity to survive the economic slowdown and expects to maintain positive cash flow positive for the full fiscal year.
"The housing environment is difficult. All public builders are having challenges. The focus is on liquidity, it's on cash flow, both for our company and the industry...and we just have to weather through it," said Hovnanian.
In re signs of improvement, the CEO said:
"It always starts with little anecdotes, and little pockets of good news, and we even have little pockets in locations where we're actually raising prices. Unfortunately, they're absolutely the exception, rather than the trend.
"There are a few glimmers of hope that give you encouragement, for example, our cancellation rate. This quarter we reported it at 29 percent; last quarter it was 38 percent; the quarter before that, it was 40; so, it's really trending down, getting back to normal levels.
"Existing home inventories are leveling off; it's not improving yet, which is what we need, but it's not getting worse...and new-home inventory is fairly in control, and has been coming down among all the public homebuilders.
"We're actually seeing in a few locations in New Jersey that we're able to raise prices; there is a location or two, hard as it may be to believe, in California, and...in Houston, we've been able to raise prices, but, again, I'm giving you a few anecdotes.
"I wouldn't run out and pop the champagne cork yet," Hovnanian said.
