The net loss in the quarter ended 30 September was $643.8 million or $5.26 a share, compared with a net income of $137.4 million, or $1.11, a year earlier. Second-quarter revenue fell 21 per cent to $2.2 billion. Centex recorded $983 million in land writedowns and charges and said its cancellation rate was a staggering 35 per cent.

The company says it has "meaningfully reduced prices in order to improve affordability for our home buyers". September home sales are forecast to fall to a seven-year low as lenders tighten credit standards. Defaults doubled last month from a year ago.

Homebuilders are having to contend with a more than eight-month supply of unsold homes, the most in at least six years, and are cutting prices to clear inventories. Centex is projected to have a net loss of $5.52 a share, according to Wall Street analysts.

Pulte Homes Inc, the third-largest US builder, and Ryland Group Inc, a large builder, will declare quarterly results on Wednesday 24 October. Pulte is forecast to report a net loss of $1.18 a share. Ryland may report a net loss of $1.06 a share.

Total purchases of new and existing homes fell to an annuallised pace of 6.02 million, the fewest since August 2000. Centex said the average sale price for a home sold in the quarter was $280,816, down 8 per cent from $305,201 a year ago.

The median price for a house sold in Dallas, Texas, in September was $160,300, up 6 per cent from $151,200 a year ago, according to the Real Estate Centre at Texas A&M University in College Station, Texas. The median price in the Riverside-San Bernardino area was $377,130 in August, a 7.4 per cent decrease from a year earlier, according to the California Association of Realtors.