Los Angeles-based KB Home lost 70 cents, or 1.8 percent, to $38.67 after Citigroup said that waning demand for new homes and high inventories will keep the shares from rebounding this year.

Shares in KB are still suffering from the company reporting a $150-million loss along with a 36 percent slide in sales last week for its first quarter. Shares have lost 18 percent over the last month.

Calabasas-based Ryland Group Inc. also lost 84 cents after a downgrade from Citigroup to $36.53 in morning trading Monday on the New York Stock Exchange. Ryland also reported a $24 million loss along with a 34 percent dip in sales also for its first quarter. Shares in Ryland have lost 18 percent as well over the last month.

A gauge of 16 homebuilders in the S & P; index has dropped 27 percent so far this year.