Homebuilder KB Home on Wednesday said it had seen a “meaningful” increase in orders over the first several weeks of its first quarter, after a dip in mortgage rates last month made buying a home more attractive.
“We have experienced a meaningful sequential increase in our net orders for the first five weeks of our 2024 first quarter, as consumers are responding favorably to the recent decline in mortgage rates,” Chief Executive Jeffrey Mezger said in the company’s fourth-quarter earnings release.
“With improving market conditions and our projected community count growth for 2024, we believe we are well-positioned to meet buyer demand,” he said.
The company, whose homes often appear in development communities and in open spots in urban areas, reported fourth-quarter results that beat expectations. But for the year ahead, it signaled that home prices could fall from where they stood in the fourth quarter.
Shares KBH, +1.06% were down 2.4% after hours.
KB Home reported net income of $ 150.3 million, or $ 1.85 a share, down from $ 216.4 million, or $ 2.47 a share, in the same quarter last year. Revenue of $ 1.67 billion was down from $ 1.94 billion in the prior-year quarter.
Analysts polled by FactSet expected earnings per share of $ 1.70, on sales of $ 1.63 billion.
Homes delivered fell 10%, to 3,407, from a year prior, and the average price for its homes fell to $ 487,300 from $ 510,400.
For its fiscal year ahead, set to wrap up around the end of November, KB Home said it expected an average selling price of between $ 480,000 and $ 490,000 for its homes. It said it expected housing revenues of $ 6.4 billion to $ 6.8 billion. Analysts polled by FactSet expected around $ 6.66 billion.