By Helen Chernikoff

NEW YORK (Reuters) - D.R. Horton Inc (DHI.N: Quote, Profile, Research), the largest U.S. home builder, posted a bigger-than-expected third- quarter loss on Tuesday as it wrote down the value of more holdings in a decimated real estate market.

The loss narrowed to $399.3 million, or $1.26 per share, from $823.8 million, or $2.62 per share, a year earlier, but lagged analyst estimates of 82 cents per share, according to Reuters Estimates.

Home-building revenue in the third quarter ended June 30 dropped to $1.4 billion from $2.5 billion a year earlier, as the number of homes sold fell 36 percent to 6,167.

This was the fourth consecutive quarterly loss for D.R. Horton, whose traditional customers are first- or second-time home buyers. The company builds homes in 27 states with sales prices ranging between $90,000 and $900,000.

With foreclosures rising and home prices falling, the worst U.S. housing slump in decades has helped push three builders into bankruptcy: Tousa Inc, Levitt & Sons and, on Monday, WCI Communities Inc (WCIMQ.PK: Quote, Profile, Research).

The survivors have had to mark down the value of their inventories. D.R. Horton's latest loss included $330.4 million in charges for inventory impairments and write-offs for land the company owns, but does not believe it can profitably develop.

Projects in California, the West and the Midwest absorbed 70 percent of those charges, the company said during its conference call. The Carolinas, where the company raised prices slightly and will continue building, proved more robust, as did Texas.

In response to the deteriorating market, builders have shifted their focus from profit and growth to cash generation by ramping up incentives and selling the land and inventory they accumulated at peak prices during boom times.