Hovnanian Enterprises swung to a net loss in its fiscal third quarter, marking a sharp reversal from the year-ago period's profit as elevated mortgage rates and fragile consumer sentiment continued to weigh on the housing market.

For the three months ended July 31, the homebuilder reported a loss of $1.8 million, or $0.70 per share, compared with net income of $16.6 million, or $1.99 per share, in the same quarter last year. Total revenue declined 12% year over year to $705.7 million.

The company's gross margin from homebuilding, excluding sales costs, interest expense, and land charges, came in at 14.6% for the quarter, down from 17.3% in the year-earlier period.

Chief Executive Ara Hovnanian said the quarterly results were broadly in line with the company's previously issued guidance. He noted that the housing market continues to face considerable pressure from geopolitical and economic uncertainty, persistently high mortgage rates, and fluctuating consumer confidence, while emphasizing that the company remains focused on operational execution amid the challenging environment.

Looking ahead to the current quarter, Hovnanian guided total revenue in the range of $800 million to $900 million, with adjusted homebuilding gross margin expected to land between 15% and 16.5%.

Shares of Hovnanian fell 7.5% in early trading to $118.02.