Why does it seem that Citigroup Inc. (NYSE: C) is late to the homebuilding slump? Because they are. The housing sector has been in the dumps for months now and yet only this morning did Citigroup downgrade stocks in the sector. Citigroup downgraded D.R. Horton Inc (NYSE: DHI), Hovnanian Enterprises Inc (NYSE: HOV), KB Home (NYSE: KBH), Lennar Corporation (NYSE: LEN), Pulte Homes Inc (NYSE: PHM), Toll Brothers Inc (NYSE: TOL) and The Ryland Group Inc (NYSE: RYL) to Hold from Buy as they believe "shares will remain range-bound through the rest of the year."

Let's recap:

KB Home: The company reported a second quarter loss and sales hit three-year lows. The loss was partly due to land value-related charges that highlighted the continued decay of the U.S. housing market. The company also said it was unable to provide investors with a full-year earnings forecast and couldn't say when they thought conditions would improve.

Lennar: Reported a Q2 loss. The company said market conditions had eroded so much that it's not trying to limit its losses for the year.

Pulte Homes: In response to the "challenging operating environment that continues to exist in the U.S. homebuilding industry," the company announced a restructuring plan designed to reduce costs and improve operating efficiencies in May.

Get the picture? Here's one more:

Ryland Group: Reported a Q1 loss in April and said it wouldn't be able to provide new guidance due to the slump in the housing market.

See a pattern? Homebuilder after homebuilder, it's the same story -- company faces challenging housing market, company loses money, tries to regain profitability. You'd think Citigroup would have noticed.

Aside from the companies themselves, other firms and analysts have said their piece about the sector. March data showed sales of existing homes fell to a four-year low. In April, Census Bureau data showed there were 2.5 million vacant non-seasonal housing units for sale, way over many firms' predictions. Additionally, AG Edwards said on April 30th that "it is not a good time to buy shares yet." Standard & Poor's said in May that they believed over a third of all U.S. homebuilders were "vulnerable to rating downgrades" in the midst of a "three-year downturn."

This is not news. Maybe Citigroup just missed it.