MIAMI - Lennar Corp.'s struggles may not be over anytime soon with the housing market showing no signs of recovery.

The Miami-based company, one of the nation's leading home builders, said Tuesday that it stumbled to a second-quarter loss as inventories of unsold homes rose. The company cut prices and offered more incentives to attract skittish buyers.

Lennar also warned that it is likely to post a loss through at least the third quarter.

"As we look to our third quarter and the remainder of 2007, we continue to see weak, and perhaps deteriorating, market conditions," President and Chief Executive Officer Stuart Miller said.

For the second quarter, losses were $244.2 million, or $1.55 a share, compared with a profit of $324.7 million, or $2 a share, in the previous year.

Lennar took a charge of $1.33 per share for valuation adjustments and write-offs of option deposits and pre-acquisition costs.

Analysts surveyed by Thomson Financial forecast a profit of 5 cents a share. The estimates typically exclude one-time charges, but Lennar fell far short regardless.

Quarterly revenue slid 37 percent to $2.88 billion, from $4.58 billion in the year-ago period. That still beat the analyst consensus of $2.58 billion. Shares of Lennar fell $1.20, or 3 percent, to $37.55 Tuesday.

Lennar's loss reflects broader problems in the housing market, with the Commerce Department reporting Tuesday that sales of new homes fell in May for the fourth time in five months.

On Monday, the National Association of Realtors reported that sales of existing homes fell for a third straight month in May and the median sales price declined for a record 10th consecutive month. Inventory of unsold homes shot up to the highest level in 15 years.

Miller said Lennar is cutting prices to sell inventory, but that has led to slimmer profit margins. Gross margins on home sales were 13.6 percent, compared with 23.7 percent in the second quarter of 2006.

Miller said the company anticipates a third-quarter loss but did not offer guidance.

Lennar is focused on expenses, reducing construction costs and pushing sales to convert land and new home inventory into cash, Miller said.

Lennar has cut back on housing starts by more than 50 percent from last year as it unloads inventory, Miller said.

In the second quarter, Lennar delivered 9,568 homes, down 28 percent from last year, while new orders totaled 8,056 homes, a 31 percent drop. Prospective buyers canceled orders at a rate of 29 percent. Lennar showed a backlog of 8,199 homes, at a value of $2.8 billion, in the second quarter.

JPMorgan analyst Michael Rehaut said the drop in new orders and flat cancellation rate were about in line with estimates, but the charges and deterioration of gross margins were worse than expected.

The average sales price of homes delivered decreased to $298,000, compared with $322,000 in the same period last year. The drop stemmed from sales incentives that averaged $43,700 per home. Incentives averaged $24,700 in the second quarter last year.