Kaufman & Broad Shares Decline on Interest Rate Fears

Shares of home builder Kaufman & Broad Home Corp. fell more than 8% Wednesday as investors grew worried about reduced demand for new housing in the wake of rising interest rates.

The stocks of several other major builders--including Lennar Corp. and Pulte Corp.--also declined, but Los Angeles-based Kaufman & Broad took the biggest hit. Its shares fell $1.63 to $18.25 on the New York Stock Exchange.

Investors may be focusing on rising rates, but job creation and the overall strength of the economy play a greater role in new-home demand, argued analyst Robert Curran at Merrill Lynch. Still, almost all builders’ stocks are at or near 52-week lows.

Kaufman & Broad also announced several management appointments, including the promotion of Jeffrey T. Mezger, 44, to the newly created position of executive vice president and chief operating officer.

Other promotions included Glen W. Barnard, 54, to executive vice president of strategy development and president of the firm’s online operations; Albert Z. Praw, 51, to senior vice president, asset management and acquisitions; and John “Buddy” E. Goodwin Jr., 52, to senior vice president and regional manager for the Texas division.