L.A. builder KB Home narrows loss as home prices rise
KB Home sold more new homes at higher prices during the second quarter, narrowing the Los Angeles builder’s loss as it benefited from a hot housing market.
The firm — the largest production homebuilder in Southern California — beat analysts’ expectations Thursday, reporting a net loss of $3 million, or 4 cents per share. That’s a significant improvement from a $24.1-million loss, or 31 cents per share, during the same period last year.
The average sales price for the company’s homes increased 24.6% to $290,400, as prices rose in all of KB’s regions. That, along with more homes sold, helped propel revenue to $524.4 million in the three months ended May 31, 73% more than the same period last year.
Southern California’s housing recovery: An interactive map
The outlook for new home construction has improved this year, helped by rising home values and extremely tight inventory. New homes sales in May reached the highest rate in nearly five years and builders are increasingly confident in the new home market.
KB sold 39% more newly constructed homes in the second quarter.
Still, concerns over rising mortgage rates have beaten down homebuilder stocks recently.
KB Home’s stock is down about 20% from recent May highs. It closed at $19.71 per share Thursday, down nearly 1% from a day earlier.
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