NEW YORK (Thomson Financial) - Homebuilding ETFs tumbled to all-time lows Tuesday after a trade association report showed pending U.S. home sales fell more than expected in November while KB Home's chief executive warned of a 'tough' year for the industry in 2008.

The iShares Dow Jones U.S. Home Construction ETF (ITB) tumbled 5.2% to $14.35. The S&P Homebuilders SPDR ETF (XHB) dropped 5.3% to $15.96.

U.S. homebuyers in November signed fewer contracts to buy previously owned homes than they did in October, ending a two-month streak of increased pending home sales. The National Association of Realtors' pending home sales index fell by 2.6% in November to 87.6. Economists polled by Thomson's IFR Markets were expecting a 0.5% drop from October.

Shares of KB Home tumbled 8.7% to $16.88 after reporting a fiscal fourth-quarter loss of $772.7 million, or $9.99 a share, wider than a year-ago loss of $49.6 million, or 64 cents a share.

'The challenging market conditions we experienced through the first three quarters of 2007 continued during the fourth quarter,' said Jeffrey Mezger, the company's president and CEO. 'We believe 2008 will be another tough year for the homebuilding industry.'

Elsewhere in the sector, shares of WCI Communities Inc. tumbled 110.4% to $3.28, Lennar Corp. fell 7.2% to $14.64, and D.R. Horton lost 5.4% to $10.36.

Ryland Group Inc. dropped 4.7% to $21.26 and Pulte Homes Inc. dropped 4.1% to $8.68.

Hovnanian Enterprises Inc. declined 9.2% to $5.12.

Wanfeng Zhou

wz/vj



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