DETROIT (Dow Jones) -- The top executive at Pulte Homes Inc. (PHM) said Thursday that the traditional U.S. spring selling season was more "normal" this year, though homebuilders are still battling weak demand and industry oversupply.

Richard Dugas, chief executive of the second-largest U.S. builder by revenue, also called for more state incentive programs to complement a federal tax credit that has already spurred the first-time buyer market.

Dugas, speaking after Pulte's annual meeting in Pontiac, Mich., said the first-time buyer market remains an area of relative strength.

Pulte is targeting the sector as well as the first-time move-up buyer through its proposed purchase of third-ranked Centex Corp. (CTX), a deal that would create the largest U.S. builder.

Homebuilders are cutting inventory and new-home sales fell just 0.6% in March but still have to contend with more severe weakness in the existing homes segment where the inventory of unsold homes has been bloated by foreclosures.

Dugas reiterated the long-standing position of many industry executives that there were signs for optimism in the market, but stopped short of declaring a bottom had been reached.

He said the industry's spring selling season was 'a little more normal", though it could be some time before regular seasonal patterns return.

"We may even see a bounce in the third and fourth quarter," Dugas said.

The four-month period after the Superbowl has traditionally accounted for as much as three-quarters of U.S. home sales, but the spurt failed to emerge last year.

Dugas' call for more state support follows the success of a tax credit of up to $10,000 provided to new-home buyers in California.

Other states are considering their own subsidies to supplement the recently enacted federal program, including plans in Illinois and Michigan for new-buyer credits of up to $5,000 and $10,000, respectively. Georgia recently implemented a tax credit of up to $1,800 on purchases of new or existing homes.

"The federal program has helped for first-time home buyers, but it's limited," said Dugas. "We'd like to see more programs for all home buyers."

The federal credit of $8,000 is for first-time home buyers, but applies to all purchases, not just new homes.

The California credit drew criticism because it doesn't address the issue of foreclosed homes dragging down home values. But it's also credited with helping halt the slide in new-home sales, which rose 14% in the West in March.

The all-stock Centex deal is scheduled to close in the third quarter. Pulte is offering 0.975 of its own shares for each Centex share.

Pulte shares were up 1.6% at $10.03, valuing its offer at $9.78 compared with the $10.50 pre-announcement level on April 7. Centex shares were 1.9% higher at $9.56.

-By Sharon Terlep; 248-204-5532; sharon.terlep@dowjones.com.