MIAMI - Lennar Corp., one of the nation's largest homebuilders, said Thursday it swung to a loss in the first quarter as it absorbed charges to adjust land values, while new home sales and prices sank amid the stumbling real estate market.

Stuart Miller, chief executive of the Miami-based builder, said in a conference call that he thinks the economy has slipped into recession, based on factors such as a weakening labor market, growing jobless claims, and higher food and energy prices.

But Miller expressed hope that the housing market, and the economy, could be helped by initiatives that have been or could be proposed to fix it.

"There is a growing consensus that the deterioration of the housing market has likely led us into recession, and the stabilization and recovery of the housing market will likely lead us out," Miller said in Lennar's earnings release. "Accordingly, we expect that some of these initiatives and the many that are being discussed will lead to a bottom and recovery."

Lennar reported a loss of $88.2 million, or 56 cents per share, in the three months ended Feb. 29 compared with profit of $68.6 million, or 43 cents per share, in the year ago quarter.

The results included a 38 cent-per-share charge related to valuation adjustments and write-offs of option deposits and pre-acquisition costs. After those adjustments, Lennar's loss was 18 cents a share.

The adjusted results were better than estimates on Wall Street, where the mean estimate of analysts polled by Thomson Financial was for a loss of $1.07 per share. Some analysts include write-down estimates in their predictions, while others do not.

Sales fell 62 percent to $1.06 billion from $2.79 billion in the year-ago period. The average selling price fell 8 percent.

Deliveries of new homes fell 60 percent to 3,596 homes. New home orders were down 57 percent to 3,045, with a cancellation rate of 26 percent.

Despite the drop in sales and orders, Lennar said it was encouraged that it had no outstanding balance on its credit facility and had $1.1 billion in cash for home building, as of the quarter's end Feb. 29. Miller said the "heavy lifting" on impairment charges was likely over, and the company was seeing improvements in homebuilding margins.

Investors seemed to respond, with Lennar shares rising 66 cents, or 3.8 percent, to $18.24 in afternoon trading Thursday. They are still below their 52-week high of $47.41.

While the quarter's results showed no signs of stabilizing, Lennar is "staying ahead of the curve by focusing on converting inventory into cash and by solidifying the company's balance sheet," Soleil Securities Group Inc. analyst Anna E. Torma wrote in a report.

The Lennar report comes a day after the Commerce Department reported that sales of new homes fell in February for the fourth straight month, pushing activity to a 13-year low. The median price of a new home sold last month dropped to $244,100, 2.7 percent less than the level of a year ago. The median sales price is the point where half the homes sold for more and half for less