Shares of KB Residence (NYSE: KBH) had been up over 1% on Friday. The inventory has gained 19% over the previous three months. The corporate noticed income and earnings decline within the third quarter of 2025 however the outcomes had been higher than expectations. The homebuilder anticipates an increase in demand for house possession pushed by the latest drop in mortgage charges.
Q3 outcomes
Within the third quarter of 2025, KB Residence’s revenues decreased 7% year-over-year to $1.62 billion. Earnings per share fell 21% to $1.61. Regardless of the declines, each the highest and backside line numbers got here above expectations.
Enterprise efficiency
In Q3, KB Residence noticed a 7% lower in houses delivered to three,393. Internet orders declined 4% to 2,950. Common promoting value dipped barely to $475,700. The corporate ended the quarter with a backlog of 4,333 houses with an ending backlog worth of $1.99 billion.
KBH believes the long-term outlook for the housing market is favorable. The corporate noticed demand decide up by way of the third quarter. It believes the decline in mortgage charges might result in an increase in demand for homeownership.
KB Residence’s gross sales method includes providing a clear value to drive gross sales as an alternative of offering incentives as a result of it believes this makes the method of shopping for houses simpler and easy. In Q3, pricing in its communities remained steady and it believes its communities are well-positioned by way of affordability.
Within the fourth quarter of 2025, KBH plans to emphasise built-to-order houses in its gross sales method whereas additionally promoting by way of its stock. It goals to return to its historic vary of 70% built-to-order houses from the present degree of fifty%. The expansion in built-to-order combine is anticipated to assist drive gross margin enlargement as these houses generate a gross margin that’s larger by 250-500 foundation factors in comparison with its stock houses.
Outlook
For the fourth quarter of 2025, KB Residence forecasts housing revenues to vary between $1.6-1.7 billion. Common promoting value is anticipated to be $465,000-475,000. Housing gross margin is anticipated to be 18.0-18.4% in This fall 2025.
