New home sales by M/I Homes during the first quarter of 2008 fell 40% to 554, the company reported April 10.

The Columbus, Ohio-based company said that deliveries also fell during the quarter, ended March 31, by 34% to 450. Backlog was drawn down by more than half, with the number of homes in backlog at March 31 falling to 816 from1,678 at the end of first quarter, 2007. The backlog value also fell by more than 50%, from $589 million at the end of last year's first quarter to $246 million this year.

The company said the cancellation rate fell to 23% from 25% during last year's first quarter. The average selling price was down 11%, from $335,000 last year quarter to $298,000 this year.

Regionally, new contracts were down 49% to 240 in the Midwest, down 9% to149 in Florida and down 44% in the Mid-Atlanic to 165. Deliveries were down 36% to 189 in the Midwest, down 38% to 140 in Florida and down 27% to 121 in the Mid-Atlantic. Of homes in backlog, 442 were in the Midwest, 130 in Florida and 244 in the Mid-Atlantic.

M/I Homes had 148 active communities on March 31, 2008, down from 161 on March 31, 2007.

"Selling conditions in most of our markets remain difficult," said Robert H.Schottenstein, president and CEO. "During the first quarter, we reduced our home building bank borrowings from $115 million to $42 million, and we successfully amended our unsecured credit facility thereby providing us with additional financial flexibility."

M/I is scheduled to report first quarter financial results on April 30. The company's stock (NYSE:MHO) was up 5.1% to $18.10 in mid-morning trading on relatively light volume.