Brookfield Homes (NYSE:BHS), based in Fairfax, Va., on Thursday reported a net loss of $12 million for the first quarter of 2008 as housing revenue fell 36.5% to $66 million and average selling price fell 19.2% to $571,000, both compared to the same period last year.

Contributing the the loss were impairments of $6.2 million on 222 lots in six communities and a $9.3 million loss on interest rate swaps that were undermined by declining rates in the current market.

Closings fell fell 20.5% to 120 units, a decrease from the 151 units in the first three months of 2007. Net new orders fell 20% to 231 units from the same quarter last year but were up significantly from 104 units during the fourth quarter of 2007. Backlog was down 33% to 266 homes.

Brookfield had inventory of approximately 3,400 fully developed lots at quarter's end, including more than 480 homes completed or under construction. The company¹s inventory of unsold completed homes was 156 units at March 31, 2008, down significantly from 285 units at the end of 2007.

Total lots owned, optioned or owned through joing ventures stood at 26,215 at the end of the first quarter, the vast majority of them in challenged markets in Southern California. Gross margin on housing was 15.9%, consistent with the fourth quarter of 2007 but lower than the 19.5% gross margin on housing recorded in the first three months of 2007.

The company said it continues to target generation of $100 million in operating cash flow for the entire fiscal year as it "continues to monetize its inventory of 3,400 developed lots."

Shares of Brookfield closed up 9 cents at $15.83 amid a rally in the better-capitalized builder stocks and the overall market.