A collapse in the housing market and the worst financial crisis in seven decades have hurt construction firms and helped push the country into the longest recession since World War II. Builders slashed spending on residential projects at the steepest pace in the first three months of this year since the spring of 1980.

The overall economy, as measured by the gross domestic product, shrank at an annual rate of 5.5 percent in the first quarter after a 6.3 percent drop in the final three months of last year, the steepest six-month decline in more than a half-century.

But economists believe the economy's nosedive has moderated to a drop of around 2 percent in the April-June quarter, and will begin to rebound in the second half of this year.

Los Angeles-based KB Home last week reported a loss of $78.4 million, or $1.03 per share, for the three months ending in May. But company officials said they expect a rebound in the fourth quarter of this year that will carry into next year.