Homebuilder KB Home said Wednesday it saw a “significant” increase in orders during the first few weeks of the first quarter, after lower mortgage rates last month made buying a home more attractive.
“We saw a significant sequential increase in our net applications for the first five weeks of the first quarter of 2024, as consumers respond favorably to the recent decline in mortgage rates,” CEO Jeffrey Mezger said in the company's fourth-quarter earnings release. .
“With improving market conditions and expected growth in our community population for 2024, we believe we are well positioned to meet buyer demand,” he said.
The company, whose homes often appear in development communities and urban open spaces, reported fourth-quarter results that beat expectations. But for next year, this indicated that home prices may be lower than they were in the fourth quarter.
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It fell 1.1% after hours.
KB Home reported net income of $150.3 million, or $1.85 per share, down from $216.4 million, or $2.47 per share, in the same quarter last year. Revenue of $1.67 billion was down from $1.94 billion in the prior quarter.
Analysts surveyed by FactSet expected earnings per share of $1.70, on sales of $1.63 billion.
Homes delivered fell 10%, to 3,407, compared to the previous year, and the median home price fell to $487,300 from $510,400.
For the next fiscal year, which is scheduled to end around the end of November, KB Home said it expects an average sales price of between $480,000 and $490,000 for its homes. It said it expects housing revenues of $6.4 billion to $6.8 billion. Analysts polled by FactSet expected about $6.66 billion.
