Fitch Downgrades 8 Homebuilders' IDRs

Fitch Ratings has downgraded the Issuer Default Ratings of eight homebuilders and affirmed the IDRs of four others. The downgrades were as follows: Lennar Corp., from BBB to BBB-minus; Pulte Homes Inc., BBB to BBB-minus; Centex Corp., from BBB to BB-plus; D.R. Horton Inc., from BBB-minus to BB-plus; Ryland Group Inc., from BBB-minus to BB-plus; Meritage Homes Corp., from BB-minus to B-plus; M/I Homes Inc., from BB-minus to B-plus; and Beazer Homes USA Inc., from B-plus to B. Beazer's ratings remain on Rating Watch Negative, and the Rating Outlooks for the other homebuilders' ratings remain negative. The downgrades reflect the "difficult housing environment and Fitch's expectations that housing activity will be even more challenging than previously anticipated during the balance of calendar 2008 and that new-home activity will still be on the decline well into 2009." The rating agency also cited negative trends in the companies' operating margins, further deterioration in their credit metrics, and erosion in their tangible net worth from noncash real estate charges. Fitch also affirmed the IDRs of the following homebuilders: NVR Inc., at BBB; Toll Brothers Inc., at BBB; KB Home, at BB-plus; and Hovnanian Enterprises Inc., at B-minus. The Rating Outlook is stable for NVR and negative for the other three.