Deliveries of homes fell 49 percent in the quarter and the average sale price of homes fell 9 percent. Lennar has homebuilding operations in 14 states, including California and Florida, the hardest-hit housing markets in the nation.

"While we expected the housing market to remain constrained throughout the third quarter, the weakness in the market actually accelerated as a result of increased foreclosures, weakened consumer confidence and tightened mortgage lending standards," Chief Executive Stuart Miller said in a statement. (translation - we live, breathe, die this industry and it is even worse than we predicted - but hedge fund computers apparently know better than us and are buying the stocks hand over fist - they live in a perception is reality world; unfortunately as a CEO I must live in the real world)

Miller said that the landmark housing stimulus bill enacted in July, which included a temporary, $7,500 tax credit for first-time homebuyers, has failed to stabilize the skid in U.S.