RPT-UPDATE 1-S&P downgrades five US home builders

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NEW YORK, Nov 2 (Reuters) - Standard & Poor's on Friday cut its ratings on five U.S. homebuilders, three of them to junk status, citing weak earnings and challenging conditions in the housing market.

Ratings of D.R. Horton Inc (DHI.N), Pulte Homes Inc (PHM.N) and Lennar Corp. (LEN.N) were cut into junk territory. The downgrades reflect the vulnerability of the home builders to the deteriorating housing market and macroeconomic conditions, S&P said in a statement.

D.R. Horton and Pulte were cut one notch to "BB-plus," one level below investment grade, from "BBB-minus." Lennar Corp was cut by two notches to "BB-plus" from "BBB." The outlook for all three companies is negative, indicating an additional cut is likely over the next two years.

S&P also cut Centex Corp's CTX.N debt rating by one notch to "BBB-minus," one step above junk status, from "BBB," with a negative outlook. It downgraded Standard Pacific Corp (SPF.N) by one notch to "BB-minus," three levels below investment grade, from "BB," with a negative outlook. And it changed the outlook on Ryland Group (RYL.N) to negative from stable. Ryland is rated "BBB-minus."

The negative rating actions affect $15 billion of debt, S&P said.

(Additional reporting by Dena Aubin)