UPDATE 4-DR Horton says to struggle as foreclosures stay high

* Q1 loss of 6 cts/shr vs Street View 3 cts/share loss

* Total revenue down 30.8 pct

* CEO says will be tough to be profitable in 2011

* Unable to pass higher lumber costs on to homebuyers

* DR Horton shares down 5 percent; NVR down 1.4 pct (Revises first sentence, adds comments from conference call, updates share movement)

By Phil Wahba

NEW YORK, Jan 27 (Reuters) - DR Horton Inc (DHI.N), the top U.S. homebuilder, reported a larger-than-expected quarterly loss, citing a spike in foreclosures and lingering anxiety among homebuyers, and warned that it would struggle to return to profitability this year.

DR Horton shares were down 5 percent at $12.58 in midday trading.

The company said that prospective homeowners were still being squeezed by "rising foreclosures, significant existing home inventory, high unemployment, tight mortgage lending standards and weak consumer confidence."

DR Horton said first-quarter orders fell 16.7 percent and that its average sales price during the quarter was flat.

"We are going to struggle more than we did in 2010 to be profitable," Chief Financial Officer Bill Wheat said on a conference call with Wall Street analysts.

Chairman Donald Horton said in an earlier statement that comparisons of net sales orders to a year earlier -- when a tax credit for first-time homebuyers, since expired, was in place -- would remain "very difficult" in the next two quarters. (Graphic on U.S. pending home sales: r.reuters.com/cuc77r )

But Horton said the company would get some relief from lower home prices and interest rates that will stoke demand.

There were signs of further healing in the real estate market: contracts for pending sales of previously owned homes rose 2 percent, faster than expected in December, according to the National Association of Realtors Pending Home Sales Index. [ID:nLDE70Q218]

Not helping matters, the price of lumber rose about 10 percent last year, squeezing Horton's margins. DR Horton's treasurer, Stacey Dwyer, said "depressed" demand precluded the homebuilder from passing those costs on to buyers and said that the company is in "good dialogue" with vendors.

Rival homebuilder NVR Inc (NVR.N) echoed DR Horton's woes, reporting that new orders in its fourth quarter fell 12 percent and that it had a cancellation rate of 18 percent, higher than a year ago. [ID:nASA01G4S] NVR shares were down 1.4 percent.

DR Horton said revenue from home and land sales fell 30.8 percent to $767 million and that it had an order cancellation rate of 28 percent during the quarter.

DR Horton, which has operations in 26 states, reported a loss of $20.4 million, or 6 cents per share, for the first quarter ended on Dec. 31, compared with a year-earlier profit of $192 million, or 56 cents per share, including a tax benefit of about $150 million.

On average, analysts were expecting a loss of 3 cents a share on revenue of $800.4 million, according to Thomson Reuters I/B/E/S. (Reporting by Phil Wahba; Editing by Lisa Von Ahn, Matthew Lewis, Dave Zimmerman)